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.