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.

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Definitions:

Derived Demand

The demand for a product or service that arises from the demand for another product or service it helps to produce.

Catgut

A type of cord made from the natural fibres of an animal's intestines, commonly used in the past for musical instrument strings and surgical sutures.

Innovators

Individuals or companies that introduce new products, services, or methods, often opening up new markets or changing existing ones.