Suppose the Stock of Government Debt in Canada at the End

question 75

Multiple Choice

Suppose the stock of government debt in Canada at the end of one fiscal year is $475 billion. If the stock of debt rises to $482 billion by the end of the next fiscal year, then we know that in that year

• A)debt- service payments rose by $7 billion.
• B)the government had a primary budget deficit of $7 billion.
• C)the government had a primary budget surplus of $7 billion.
• D)tax revenues decreased by $7 billion.
• E)the government had an annual budget deficit of $7 billion.

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Definitions:

Future Payment

A payment that is scheduled to be made at a specified date in the future.

Interest Rate

The cost of borrowing money, usually expressed as a percentage of the amount borrowed.

Net Earnings

The amount of income left after deducting all expenses, taxes, and costs from gross revenue.

Continuous Future

A futures contract that amalgamates several expiry contracts to create a continuous, extended trading period for investors.