According to Keynesian economics, temporary federal deficits are

unfortunate but necessary to expand the economy.

O

True

False

Answer:True

Explanation:

Federal deficit means the spending of the government is more than the revenue collected by the government through taxes. When the taxes are cut down it increases the money flow in the market that in turn increases the economic activity. When the economic activity is slow in the country then the government spends more to stop the decline in the economic growth.

The deficits can be corrected when there is economic growth. When there are surplus in the budget then the debt of the country can be paid back.