“Budget deficits should be avoided, even if the economy is below potential, because they reduce saving and lead to lower growth.” Does this policy directive follow from the short-run or the long-run...

“Budget deficits should be avoided, even if the economy is below potential, because they reduce saving and lead to lower growth.” Does this policy directive follow from the short-run or the long-run framework? Explain your answer. Your income is $40,000 per year; your expenditures are $45,000. You spend $10,000 of that $45,000 for tuition. Is your budget in deficit or surplus? Why?