Question

E Question Help Gven te information provided by en news clp. what would Congress do ส it wanted to stop the government's debt from increasing? Congress would have to us. Ran S43 Billion B The U.S. government received $232 billion and spent $275 billion in July. The deficit of $43 bilion edged the government's debt closer to the federal borrowing limit Source: The Wall Street Journal, August 10. 2017 O A. borrow from the rest of the world O B. increase the quantity of money O C. lower the interest rate D increased taxes andlor decrease expenditure

Answer 1

Solution: increase taxes and decrease expenditure

Explanation: To reduce deficit (as depicted in the enclosed news clip) the government should raise taxes and decrease expenditure. By raising or reducing the tax taxes, Congress can affects level of disposable income (after-tax income) of the households'. A raise in tax will reduce disposable income as it takes money out of households. Moreover a cut in government spending will reduce the deficits