How Is the Public Debt Calculated

question 73

Multiple Choice

How is the public debt calculated?

• A) by subtracting the government's total liabilities from its total assets
• B) by cumulating the annual government purchases over time
• C) by subtracting current government spending from current government tax revenues
• D) by cumulating the annual difference between tax revenues and government spending over the years

---

Definitions:

Equilibrium Quantity

At the market equilibrium price, the amount of goods or services that are supplied matches the amount that is demanded.

Equilibrium Price

The market price at which the quantity demanded of a good equals the quantity supplied, leading to a state of balance in the market.

Government Subsidy

Financial assistance provided by the government to businesses, individuals, or other governmental units in support of an activity deemed beneficial to the public.

Supply

The total amount of a product or service that is available to consumers, determined by factors such as price, production costs, and market demand.