Question

What is a deficit?

a. The overall amount owed by government for past borrowing
b. The annual budget shortfall between revenues and expenditures
c. The cancellation of an entitlement program
d. None of the above

Answer 1

A deficit is the annual budget shortfall between revenues and expenditures. It occurs when the government spends more money than it collects in taxes.

Step-by-step explanation:

A deficit refers to the annual budget shortfall between revenues and expenditures. When the government spends more money than it has collected in taxes, it results in a deficit. The deficit is not the same as the debt, which is the accumulated sum of all past deficits and surpluses over time.