Suppose the government's initial debt is $350 billion and that during the next two years the government runs deficits of $90 and $40 billion. If during the third year the government has a $70 billion surplus, the government's total debt at the end of the three years will be
A) $60 billion.
B) $200 billion.
C) $410 billion.
D) $550 billion.

Question

Quizplus · Accepted Answer

To find the total debt after three years, we need to add up the initial debt, the deficits from years one and two, and subtract the surplus from year three.

$350 billion (initial debt) + (-$90 billion + -$40 billion) (deficits from years one and two) + $70 billion (surplus from year three) = $410 billion.

Therefore, the answer is C.

Suppose the Government's Initial Debt Is $350 Billion and That