Answered

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What happens to the national debt if the government has a $500 billion budget deficit?
A)
The national debt increases by $500 billion.
B)
The national debt decreases by $500 billion.
The national debt will increase by $50 billion.
D)
The national debt will decrease by $50 billion.

Sagot :

Answer: A. The national debt increases by $500 billion.

Explanation:

National debt simply refers to the total debts that is owed by a particular country. Budget deficit on the other hand, has to do with a scenario whereby the proposed expenses by the government for a particular year is more than its revenue.

Regarding the question, if the government has a $500 billion budget deficit, this will lead to a rise in the national debt as the debt will increase by $500 billion as well.

Therefore, the correct option is A

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