Large federal budget deficits:

A) can best be reduced by automatic stabilizers.
B) make it difficult to use discretionary fiscal policy.
C) in the mid to late 1980s were the result of a severe recession.
D) constitute only about 1 percent of GDP.
E) have little to do with the growth of the federal debt.

Federal Budget Deficits

Occurs when a government's total expenditures exceed the revenue that it generates, excluding debt from previous years.

Discretionary Fiscal Policy

Discretionary fiscal policy involves government actions to influence economic activity through changes in taxation and spending policies, distinct from automatic fiscal stabilizers.

GDP

Gross Domestic Product represents the total value, in monetary terms, of all finished goods and services made within a country's boundaries over a defined period.