Question

(30 points asap) Which possible consequence can a budget deficit rather than a budget surplus have for a nation?

The deficit can push the Treasury department to sell fewer bills, which could result in commercial banks failing.


The deficit can create national debt, and the cost of paying off that debt could lead to the federal government cutting funding for important programs.


The deficit can lead to political instability when members of Congress resign over their failure to balance the budget.


The deficit can prevent the federal government from insuring deposits, and people could lose confidence in commercial banks.

Answer 1

The deficit can create national debt, and the cost of paying off that debt could lead to the federal government cutting funding for important programs.

Step-by-step explanation:

Answer 2

Option B

Step-by-step explanation:

In simple words, When expenditures exceed income and denote a nation's monetary wellbeing, a budget problem in form of deficit happens. The administration uses the word fiscal deficit broadly when relating to expenses instead of companies or people. Deficits incurred from the government deficit.

Inflation is amongst the principal hazards of such a budget deficit, which would be the significant rise of the market prices. A budget shortfall throughout the United States will force the reserve bank to pump more capital into the market, which is driving inflation.