What would happen to a government's total debt if it ran a budget deficit?
A) Spending would decrease.
B) Spending would increase.
C) Total debt would increase.
D) Total debt would decrease.

Question

Quizplus · Accepted Answer

If a government runs a budget deficit, it means its expenditures (spending) exceeded its income (revenue). In order to cover the deficit, the government must borrow money by issuing bonds, which adds to its total debt. Therefore, running a budget deficit would increase the government's total debt.

What Would Happen to a Government's Total Debt If It