Team C

In: Business and Management

Submitted By Bukopai
Words 1242
Pages 5
Reflection Summary
Team-C
ECO/372
Feb 10, 2012

Reflection Summary A budget deficit occurs when government expenditures exceed the amount of revenue coming into the economy through income and taxes. Since World War II, the United States government has run a large deficit, instead of a surplus. Depending on the particular condition of the economy, a deficit can be right or wrong. The goal is to improve the economy when the government runs a budget deficit. The government will spend money to help stimulate economic growth when the economy is not progressing at a rate the country expects. Both the government and society benefits from the added debt when the government spends money to improve revenue for the long-term. A budget deficit can help businesses create more jobs to limit the amount of unemployment and enhance consumer income. The debts accumulated may be the result of spending on worthwhile projects like road repair or necessary services like education. The government is also spending to establish programs for the longevity of the nation. A budget deficit can have an adverse effect on the economy. A budget deficit can result in increased debt. As the debt increases, the government increases taxes. When taxes are higher than business owners can afford, the result is an increase in unemployment. A budget deficit can also lead to an increase in printed money, which decreases the dollar value and increases inflation. Budget surplus is the opposite of the budget deficit. A budget surplus occurs when government expenditures is a result from overpayment of revenue through taxes, income, and fees. The most recent surplus was in the late 1990s ending in the early 2000s. When the government runs a budget surplus, the additional funds are spent to lower the national debt. The funds are also used to increase national savings, increase lending, and…...

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