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Suppose the federal government had budget deficits of $40 billion in year 1 and $100 billion in
year 2 but had budget surpluses of $20 billion in year 3 and $50 billion in year 4. Also assume
that it used its budget surpluses to pay down the public debt. At the end of these four years, the
federal government's public debt would have
Multiple Choice
decreased by $70 billion.
increased by $70 billion.
decreased by $70 billion.
increased by $140 billion.

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  • 1. Suppose the federal government had budget deficits of $40 billion in year 1 and $100 billion in year 2 but had budget surpluses of $20 billion in year 3 and $50 billion in year 4. Also assume that it used its budget surpluses to pay down the public debt. At the end of these four years, the federal government's public debt would have Multiple Choice decreased by $70 billion. increased by $70 billion. decreased by $70 billion. increased by $140 billion.