if an economy initially has a balanced budget, but its transfer payments increase, what happens to the…

if an economy initially has a balanced budget, but its transfer payments increase, what happens to the budget balance and national debt? choose 1 answer: a there is a budget surplus; no impact on national debt b there is a budget surplus; national debt will decrease c there is a balanced budget; national debt will increase d there is a budget deficit; the debt will increase e there is a budget deficit; no impact on national debt

if an economy initially has a balanced budget, but its transfer payments increase, what happens to the budget balance and national debt? choose 1 answer: a there is a budget surplus; no impact on national debt b there is a budget surplus; national debt will decrease c there is a balanced budget; national debt will increase d there is a budget deficit; the debt will increase e there is a budget deficit; no impact on national debt

Answer

Brief Explanations:

A balanced budget means revenues equal expenditures. When transfer - payments (a form of government spending) increase without a corresponding increase in revenues, government spending exceeds revenues, creating a budget deficit. To finance this deficit, the government may borrow, which increases the national debt.

Answer:

D. There is a budget deficit; the debt will increase