USA HISTORY

Detailed explanation-1: -A Government Deficit is the amount of money in the set budget by which the government expenditure exceeds the government income amount.

Detailed explanation-2: -Increase aggregate demand A budget deficit implies a reduction in taxes and an increase in government spending, which results in an increase in the aggregate demand of the country and subsequent economic growth, ceteris paribus.

Detailed explanation-3: -A budget deficit occurs when a government spends more in a given year than it collects in revenues, such as taxes. As a simple example, if a government takes in $10 billion in revenue in a particular year, and its expenditures for the same year are $12 billion, it is running a deficit of $2 billion.

Detailed explanation-4: -When a government’s expenditures on goods, services, or transfer payments exceed their tax revenue, the government has run a budget deficit. Governments borrow money to pay for budget deficits, and whenever a government borrows money, this adds to its national debt.

Detailed explanation-5: -Definition: The difference between total revenue and total expenditure of the government is termed as fiscal deficit.