Question

The federal government decides how much money it will spend in a year through which process?

1) calculating the national debt
2) creating a national surplus
3) setting the federal budget
4) defaulting on federal loan

Answer 1

The federal government decides its annual spending through the process of setting the federal budget, which often leads to intense debates due to its significance in resource allocation. Budget deficits affect the national debt, and a U.S. default could have severe implications.

Step-by-step explanation:

The federal government decides how much money it will spend in a year through the process of setting the federal budget. This process is pivotal in determining government expenditure on various programs and services for the fiscal year. The budgeting process is subject to intense debates because it reflects the priorities of the country and involves decisions on how to allocate limited resources. Furthermore, if the United States ever defaulted on its debt, it could cause a global financial crisis due to the pivotal role of U.S. debt securities in the world economy. Annual federal budget deficits contribute to the overall national debt, which has both short-term and long-term consequences on the economy and the country's fiscal health.