26. Which of the following best describes the relationship between a budget deficit and the national debt? Answers A. Every year with a budget deficit adds to the national debt. B. A deficit decreases the debt because deficit funds do not have to be repaid. C. Ongoing debt increases the deficit in each year's budget. D. They are the same thing. Question27. Which factors contributed to the federal government's return to deficit spending in the early twenty-first century? Answers A. tax cuts and the end of a stock market boom B. tax increases and increased military spending C. decreased spending on entitlement programs D. elimination of the balanced budget amendment Question28. An income tax credit on more fuel-efficient vehicles is an example of Answers A. a sin tax. B. discretionary spending. C. a tax incentive. D. a tax deduction. Question29. Which statement best describes fiscal policy during the 1980s? Answers A. Income tax rates were reduced, but spending was increased. B. Income tax rates and spending were both reduced. C. Income tax rates were increased, but spending was reduced. D. Income tax rates and spending were both increased