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Definition of 'Deficit Spending Unit'
A economic term used to describe how an economy or economic unit within an economy has spent more than it has earned over a period of time. To raise the necessary funds to finance a deficit, the economic unit may sell debt (or equity if the entity is a corporation).
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Investopedia explains 'Deficit Spending Unit'
During times of economic hardship, governments and municipalities are likely to run deficits to shield the effects of a recession and to spur economic growth. Although it is very unlikely that an economic unit will operate at a surplus all the time, a prolonged deficit will eventually cause long-term hardship for the economy as debt levels become too high.
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Learn how a country's current account balance reflects the country's economic health.
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Deficit can be a sign of trouble for some countries, and of health for others. Find out what it means when more funds are exiting than entering a nation.
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Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
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