Question

Based on the below excerpt from an Economics textbook, please answer the question below the text: Over the years, the federal government budget experiences imbalances. A budget deficit occurs when federal expenditures (including both spending on final goods and transfer payments such as social security benefits, welfare, unemployment benefits etc.) exceed tax revenues collected by the federal government for that fiscal (budget) year. A surplus occurs when the government collects more in taxes than it spends. For example, for four years between 1998 and 2001, a surplus existed in the U.S.federal budget. Deficit budgets returned after the 2001 recession, and following the Great Recession of 2007-2009, deficits reached record highs. In 2009, a record breaking federal deficitwas $ 1.4 trillion. In 2011, the deficit was $1.3 trillion. What happens when the government overspends, and the U.S. Treasury must borrow to finance the difference between expenditures and revenues? The answer to that question is the US Treasury borrows by selling Treasury bills (T-bills), notes, and bonds promising to make specified interest payments and to repay the loaned funds on a given date. These government securities are IOUs of the federal government. They are considered a safe haven for idle funds and are purchased by Federal Reserve Banks, government agencies, private banks, corporations, individual US citizens, and foreigners. If you own a US government savings bond, for example, you have loaned your funds to the federal government. The stock of these federal government IOUs accumulated over the years, including the Interest due is called the gross public debt, federal debt, or national debt. The national debt is the total amount owed by the federal government to owners of government securities. Question based on the above text: After reading the above text from an Economics textbook, which of the statements below would you DISAGREE with (That is what is the above text NOT saying nationals by send federal government When the government LOU Called Treury bills, and more than it has collected in tax reven . It has the difference by borrowing from both US and for and bills and in an interest on the amount borro w A federal dit is when the federal government that has co s tas The federal de w eder det are wo m es for the Between the years 1998 and 2001, the US fed h abu

Answer 1

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