Question

What will decreased deficit spending do to the national debt?

A) not affect it
B) grow the debt
C) shrink the debt
D) change monetary policy

Answer 1

C) Decreased deficit spending will shrink the National debt.

Step-by-step explanation:

In economics, if the amount of spending is more than the revenue generated, such case is known to be Deficit. When the first party owes money from the second party, the first party is said to have debt with the second party. In the same way, National debt is the money owed by the country from the other.

When the deficit is increasing year by year, this implies that the country's revenue generated is decreasing year on year. If the deficit is decreasing, it means that the country's performance has improved and the generated revenue is increasing. This will surely shrink the deficit of the Nation.