Consequences of Deficits
Topic 3 DQ 2
1. During the Great Recession, the U.S. government increased spending in an attempt to buoy the economy. Since, at the time, economic growth was stagnant—and even declining in some quarters—there was not enough government revenue generated to keep pace with spending. Consequently, the government engaged in “deficit spending.” What are fiscal deficits? What are the consequences of deficits?
2. Work on a one-sentence summary of recession. (Note: This is just a one sentence)
Answer preview
The fiscal deficit means the difference between revenue and expenditure. It is the total money spent more than income, and fiscal deficit is common in many countries across the globe. A government has fiscal deficits when the expenditure exceeds the collected revenue. Over some time, however, a government may be faced by a period of economic…
(400 words)