MACRO Se Time 60 C Directions: Each of the questions or incomplete statem comple

Question

MACRO Se Time 60 C Directions: Each of the questions or incomplete statem completions. Select the one that is best in each case and 1. A country's government runs a budget deficit when which of the following occurs in a given year? (A) The amount of new loans to developing nations exceeds the amount of loans paid off by developing nations. (B) Government spending exceeds tax revenues. (C) The debt owed to foreigners exceeds the debt (D) The amount borrowed exceeds the interest (E) Interest payments on the national debt exceed owed to the country's citizens payment on the national debt. spending on goods and services.

Explanation / Answer

The right answer is option B. Government spending exceeds tax revenue.

Explanation: A budget deficit takes place when the government earns less tax revenue than the expenses incurred by it.

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