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Which statements accurately describe debts and deficits? Select all that apply.

LO The deficit is the amount a government spends above what it brings in
The government's debt represents how much it owes from borrowing to pay for expenditures
Deficits cause debt to decrease.
Deficits cause debt to increase.
Debt is free and has few consequences for the government.
Debt requires a government to pay back more than it has borrowed

2 Answers

1 vote

Answer:

Debt is money owed, and the deficit is net money taken in (if negative). Debt and deficit are two of the most common terms in all of macro-finance, and they're also one of the most politically relevant, inspiring legislation and executive decisions that affect many people.

Despite starting with a common syllable and having deceptively similar meanings, the words don’t even have the same etymology. “Debt” derives from the Latin for “owe,” while “deficit” comes from the word for “lacking,” or “fail”—literally, the opposite of “to do.”

User KlsLondon
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4 votes

Answer:

1,2,4,6

Step-by-step explanation:

User Innokenty
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