4
QuizMultiple Choice

Fiscal Policy: Spending

Question 4 • IL-Economics

What does deficit spending require a government to do?

Answer
l
lay off workers
c
cut taxes
t
take on debt
h
hire more workers

Explanation

Deficit spending occurs when a government spends more money than it collects in revenue. It must borrow money to cover the shortfall, which means taking on debt. So the correct choice is “take on debt.”

AI-written and checked against the verified answer.

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