Which of these scenarios would be LEAST likely to cause or worsen a Federal budget deficit?
History · Middle School · Mon Jan 18 2021
Answered on
Among various scenarios, the one that would be LEAST likely to increase or worsen a Federal budget deficit is "a sustained period of economic growth." Economic growth typically leads to higher employment and increased consumer spending, which results in more tax revenues for the government without necessarily increasing government spending. As the government collects more in taxes due to higher incomes and business profits, the budget deficit—which is the difference between what the government spends and what it collects—may decrease, assuming government spending does not increase simultaneously at a higher rate.