Question

3. When the federal government's collection of tax revenues is less than what it spends in a

given year, it results in a:
a. Federal Reserve allowance
b. GDP deflator
C. Balance of paymerits deficit
d. National deficit

Answer 1

d. National deficit

Step-by-step explanation:

A national deficit occurs when the federal government expenditures exceed the revenues collected. Every year, the federal government prepares a national budget for the following financial year. The budget details the expected expenditures and the projected revenues. In recent years, the expenditures have been exceeding the revenues collected, leading to a national deficit.

The federal government resorts to borrowing to cover the gap between the expenses and revenue collected.