Which of the Following Is Correct with Regard to Budget

question 94

Short Answer

Which of the following is correct with regard to budget deficits and the national debt?
Canada's national debt is the amount of money Canada owes the United States.
A budget deficit occurs when income tax revenue is less than interest payments on the national debt.
A budget deficit occurs when government expenditures in a given year exceed government revenues.
There is no relationship between annual budget deficits and the total national debt.
The national debt is more important than annual budget deficits.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a marketplace.

User Cost

The cost of using a good or service, which includes the opportunity cost of choosing one alternative over others.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Delayed Extraction

The postponement of resource or raw material extraction to achieve more efficient processing or higher market values at a later time.