Respuesta :
Government expenditure that increases deficits will eventually require more taxes to cover interest costs. On the other hand, when there is a surplus in the budget, taxes eventually need to be reduced.
What occurs when the federal government adopts a deficit spending strategy?
In deficit spending, the government uses borrowed funds to pay for relief and other initiatives that are typically intended to enhance the general economy rather than increasing taxes.
Why is spending by the government beneficial?
Spending is frequently thought of as a tool to increase economic growth through the Fiscal Multiplier. According to this multiplier, an increase in government spending causes some indicators of overall economic output, like GDP, to rise.
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