QQuestionEconomics
QuestionEconomics
"High government expenditures can lead to a bigger
A. revenue
B. stimulus
C. deficit
D. surplus
"
12 months agoReport content
Answer
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Step 1:Let me solve this economics problem step by step:
Step 2:: Understand the Key Economic Concept
The question is asking about the relationship between government spending and budget outcomes. When government expenditures exceed its revenue, this creates a budget condition known as a deficit.
Step 3:: Analyze the Terminology
- Revenue: Money coming into the government (taxes, fees) - Stimulus: Government spending to boost economic activity - Deficit: When government spending is greater than its revenue - Surplus: When government revenue exceeds its spending
Step 4:: Apply Economic Logic
If high government expenditures are greater than incoming revenue, the result will be a budget deficit. The government is spending more money than it is taking in.
Step 5:: Identify the Correct Answer
The correct answer is C. deficit.
Final Answer
Explanation: When government spending is high and exceeds its revenue collection, it creates a budget deficit, which means the government must borrow money to cover its expenses. This is a fundamental concept in public finance and macroeconomic policy.
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