Question

When the government spends more than it collects in taxes it has a budget ________, which it finances by _______ from the private sector or from foreign governments.

Answer 1

When the government spends more than it collects in taxes, it runs a budget deficit and finances it by borrowing from the private sector or foreign governments.

Step-by-step explanation:

When the government spends more than it collects in taxes, it runs a budget deficit. The government finances this deficit by borrowing from the private sector or from foreign governments. This borrowing can take the form of selling treasury bonds and other forms of government debt to raise necessary funds.