Question

U.S. national debt​ ______ when the federal​ government's ______.

A.
​decreases; tax revenue rises faster than outlays
B.
​increases; outlays exceed tax revenue
C.
​decreases; outlays exceed tax revenue
D.
​increases; tax revenue rises faster than outlays

Answer 1

B. U.S national debt increases when the federal government’s outlays exceed tax revenue

Step-by-step explanation

Outlays are transfer payments, expenditure done on goods and services and debt interest. The federal government creates it budget balance by subtracting the outlays from revenue. If the revenue is more than the outlays, the government has a budget surplus. When the outlays exceed revenues, the government has a budget deficit.