Suppose that the federal government had a budget deficit of $60 billion in year 1 and $70 billion in year 2, but that it experiences budget surpluses of $50 billion in year 3 and $10 billion in year 4. Also assume that the

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Suppose that the federal government
had a budget deficit of $60 billion in
year 1 and $70 billion in year 2, but
that it experiences budget surpluses of
$50 billion in year 3 and $10 billion in
year 4. Also assume that the
government uses any budget
surpluses to pay down the public debt.
At the end of these four years, the
Federal government's public debt
would have
decreased by $60 billion.
decreased by $57.5 billion.
increased by $60 billion.
increased by $190 billion.
Transcribed Image Text:Suppose that the federal government had a budget deficit of $60 billion in year 1 and $70 billion in year 2, but that it experiences budget surpluses of $50 billion in year 3 and $10 billion in year 4. Also assume that the government uses any budget surpluses to pay down the public debt. At the end of these four years, the Federal government's public debt would have decreased by $60 billion. decreased by $57.5 billion. increased by $60 billion. increased by $190 billion.
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