Suppose the government starts with a debt of $0.Then in year 1, there is a deficit of $100 billion, in year 2 there is a deficit of $60 billion, in year 3 there is a surplus of $40 billion, and in year 4 there is a deficit of $20 billion.What is government debt at the end of year 4?

Question

Quizplus · Accepted Answer

The government debt at the end of year 4 is calculated by adding the deficits and subtracting the surplus: $100 billion (year 1) + $60 billion (year 2) - $40 billion (year 3) + $20 billion (year 4) = $140 billion. Interest rates are not considered in this calculation.

Suppose the Government Starts with a Debt of $0