Question

Imagine the federal government has a national debt of $10.2 trillion. Congress' budget for the coming year includes a spending projection of $4.2 billion. Tax revenue projects $3.8 billion. Which fiscal policy would Congress have to adopt to maintain spending levels without increasing the debt?

Answer 1

The answer to the question is: decrease in spending. Imagine the Federal government has a national debt of $10.2 trillion. Congress' budget for the coming year includes a spending projection of $4.2 billion. Tax revenue projects at $3.8 billion. The fiscal policy that should be adopted would be decrease in spending so that there's a maintenance in spending levels without having to increase the debt.