34
QuizMultiple Choice

Fiscal Policy: Spending — Quiz

Question 34 • Economics

What does deficit spending require a government to do?

Answer
A
lay off workers
B
cut taxes
C
take on debt
D
hire more workers

Explanation

Deficit spending happens when a government spends more money than it collects in revenue during a period. It must borrow money to cover the gap, which means taking on debt. Therefore, the correct choice is “take on debt.”

AI-written and checked against the verified answer.

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