If the Government Has No Debt Initially, but Then Has

question 87

Multiple Choice

If the government has no debt initially, but then has annual revenues of $10 billion per year for 4 years and annual expenditures of $10.5 billion per year for 4 years, then the government has

• A) a budget surplus of $0.5 billion per year and a debt of $2 billion at the end of the 4 years.
• B) a budget deficit of $0.5 billion per year and a budget surplus of $2 billion at the end of the 4 years.
• C) a budget deficit of $0.5 billion per year and a debt of $2 billion at the end of the 4 years.
• D) a budget surplus of $0.5 billion per year and a surplus of $2 billion at the end of the 4 years.

---

Definitions:

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced using limited resources.

Efficiently

Performing or functioning in the best possible manner with the least waste of time and effort, ensuring productivity and effectiveness.

Total Output

The aggregate quantity of goods or services produced by an economy, sector, or firm within a given period.

Specialize

Focus on a specific area of expertise or production to achieve greater efficiency.