Definition of deficit
- a deficit in rainfall
- cognitive deficits
- a hearing deficit
- scored two runs to overcome a 2–1 deficit
The government is facing a deficit of $3 billion.
We will reduce the federal budget deficit.
The team overcame a four-point deficit to win the game.
She has a slight hearing deficit in her left ear.
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A deficit occurs when expenses exceed revenues, imports exceed exports, or liabilities exceed assets. A deficit is the opposite of a surplus.
Fiscal deficits occur when an entity's (usually a government) expenditures exceed its revenue. A government usually borrows money to fill the gap or "fund the deficit." Most governments finance their debt by selling government bonds.
Trade deficits (also called current account deficits) occur when a country imports more than it exports. The difference between exports and imports is called net exports.
Deficits are controversial. The famous economist John Maynard Keynes argued that fiscal deficits stimulated economies by allowing governments to purchase goods and services and were thus particularly useful for getting countries out of recessions. However, many scholars argue that governments should not incur fiscal deficits regularly because the cost to service the debt takes away from government spending that could be better used elsewhere.
Meanwhile, supporters of trade deficits say they are the direct result of global competition. Thus, the deficits exists because consumers are making a choice to buy foreign goods whether it be because of a difference in quality, price, or any other reason. Opponents of large trade deficits believe the deficit provides jobs to foreign countries instead of creating them at home, thus hurting the domestic economy.
: an amount (such as an amount of money) that is less than the amount that is needed
: the amount by which a person or team is behind in a game or contest
: a problem that causes a decrease in some ability
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