Which of the following is the amount by which government spending for a year exceeds government income? A) Reaganomics B) trickle down C) supply-side economics D) budget deficit

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

The only answer of these that is possible is D.  The government deficit is the amount that the government spends each year over and above what it takes in in revenues.

All of the other three options that you give here are essentially the same thing.  Reaganomics was the term given to Ronald Reagan's economic plans by his enemies.  His plan was based heavily on supply side economics, which his critics tended to call "trickle down economics."

Please be able to distinguish between the government deficit and the national debt.  The debt is the accumulated sum of all the deficits that the government runs each year.  The deficit is simply how much the government goes over its receipts each year.

caledon's profile pic

caledon | High School Teacher | (Level 3) Senior Educator

Posted on

In agreement with pohnpei397; the answer is D. This is evidenced by the fact that the other three options all describe methods and philosophies about economics, rather than specific economic conditions or circumstances, which is what the question asks.

It's entirely possible that Reaganomics or any other economic plan could lead to government spending exceeding its income, but this is not necessary, guaranteed nor inevitable in any particular model. We might also state that the analysis of a budget exceeding its income to be a post hoc ("after-the-fact") analysis which cannot be made with 100% accuracy before that budget's timeframe has passed, i.e. we can't say we've exceeded the budget and run up a deficit until we know that we won't get any more money before the books close.

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