Suppose the government's initial debt is $400 billion. If for the next three years the government runs deficits of $150, $125, and $200 billion, the government's additional debt at the end of the three years will be
A) -$50 billion.
B) $50 billion.
C) $475 billion.
D) $900 billion.

Question

Quizplus · Accepted Answer

The additional debt at the end of the three years will be the sum of the deficits over those years. 
$150 billion + $125 billion + $200 billion = $475 billion. 
Therefore, the government's total debt at the end of three years will be $875 billion ($400 billion initial debt + $475 billion additional debt).

Suppose the Government's Initial Debt Is $400 Billion