Asked by Nicholas Malmquist on Jun 24, 2024
Verified
Statement I: The federal budget deficit is the same thing as the national debt.
Statement II: The national debt will continue to rise even if the federal budget deficit is lowered.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Federal Budget Deficit
The shortfall that occurs when the federal government's expenditures exceed its revenues within a fiscal year.
National Debt
The total amount of money that a country's government has borrowed, typically from domestic or international lenders.
- Comprehend the magnitude and consequences of a country's debt.
- Understand the connection between the country's debt, the government's budget, and indicators of economic health.
Verified Answer
FH
Faris HanisJun 29, 2024
Final Answer :
B
Explanation :
Statement I is false as the federal budget deficit is the difference between the government’s revenue and expenses in a given year, whereas the national debt is the total amount of money owed by the government. Thus, they are not the same thing.
Statement II is true as even if the federal budget deficit is lowered, the government will still need to borrow money to pay for its expenses, and hence, the national debt will continue to rise.
Statement II is true as even if the federal budget deficit is lowered, the government will still need to borrow money to pay for its expenses, and hence, the national debt will continue to rise.
Learning Objectives
- Comprehend the magnitude and consequences of a country's debt.
- Understand the connection between the country's debt, the government's budget, and indicators of economic health.