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Consider that a federal deficit exists. What might this indicate that the president and Congress are...

Consider that a federal deficit exists. What might this indicate that the president and Congress are doing fiscally? a. following a Keynesian policy b. following only an expansionary policy c. following only a contractionary policy d. following either expansionary or contractionary policies

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Answer: b. following only an expansionary policy

A federal deficit means that expenditure of a government exceeds its revenue

Government revenue = Tax receipts.

Government expenditure = Government spending.

So if government spending exceeds tax revenue this means that

This means that the president and congress are following an expansionary fiscal policy.

Expansionary fiscal policy is when the government expands the money supply in the economy using budgetary tools to either increase spending or cut taxes—both of which provide consumers and businesses with more money to spend

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