Question

This graph shows US government revenue and expenditures between 1980 and 2010.

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but the money spent is generally higher than the money received. Around 2008, the amount of money spent increased and money received decreased.

Which statement describes what this graph indicates about government spending?

The government spends less than it receives year over year.
The government should produce more money to cover spending.
The government on average spends more than it collects.
The government needs to lower taxes to cover spending.

Answer 1

The government on average spends more than it collects.

The graph shows expenditures are generally higher than receipts across the period (with a particularly large gap around 2008), indicating persistent deficits. The other choices are incorrect or irrelevant to what the graph shows.