8 Questions
What does it mean when the federal government has a budget deficit?
It spends more money than it receives in taxes in a given year
How is the government debt different from the government deficit?
The deficit refers to what happens each year, while the debt is accumulated over time
If a tax system increases with increasing income, what type of tax is it?
Progressive tax
How does borrowing $10,000 per year for each of four years relate to deficits and debt?
Each year represents a deficit, and all years together represent the debt
What is the main difference between the government deficit and the government debt?
The deficit represents a yearly budget imbalance, while the debt is the accumulation of past deficits and surpluses.
How does a balanced budget differ from a budget surplus or deficit?
A balanced budget occurs when government spending equals tax revenues, while a surplus or deficit involves spending more or less than tax revenue.
If a government consistently spends more than it receives in taxes for several consecutive years, what term would be used to describe its financial status?
Deficit spending
Which type of tax system would be most beneficial for wealth redistribution in a society?
Progressive tax
Learn about the concepts of budget deficit, surplus, and debt in the context of government spending and taxes. Understand the difference between deficit and debt, as well as the significance of a balanced budget.
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