Which of the following best describes the relationship between government deficit and government debt?

Question

Quizplus · Accepted Answer

Government deficit refers to the excess of government expenditures over government revenues in a given year, while government debt is the total amount of money owed by the government over time. If a government has a deficit, it means it is spending more than it is earning, and it needs to borrow money to cover the difference. This borrowing increases the government debt. Therefore, if the government currently has a budget deficit, the debt is increasing (Option B is correct). Options A, C, and D are incorrect, as they do not correctly describe the relationship between deficit and debt.

Which of the Following Best Describes the Relationship Between Government