Define the term 'budget deficit' and explain its potential macroeconomic effects.

Define the term 'budget deficit' and explain its potential macroeconomic effects.

• A. A budget deficit occurs when government spending exceeds revenue.
• B. A budget deficit occurs when revenue exceeds spending.
• C. A budget deficit is when taxes are too high.
• D. A budget deficit means the economy is in full employment.

Answer: (A)