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Which of the following situations could cause a budget deficit for the federal government?

A) The federal government issues more treasury bonds than treasury notes.
B) Government spending decreases.
C) There is a recession.
D) The federal government raises taxes.

User John Fox
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2 Answers

5 votes

Answer: The answer is letter C.

User Ceyda
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The answer is letter C. There is a recession. It is a temporary economic decline when trade and business activities are lessened which leads to the GDP of the country to reduce in numbers. If the decline would last for at least 6 months, this will cause a major impact on the real GDP,
User Vinko Vorih
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