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:

Igneous Rock

Rock formed from cooled and solidified magma or lava.

Basalt

A dark, dense, igneous rock formed from the rapid cooling of basaltic lava exposed at or very near the surface.

Systems Thinking

A holistic approach to analysis that focuses on the way different parts of a system interact with each other within the whole.

Mental Models

Internal representations or frameworks that individuals use to understand and interact with the world.