The difference between a budget deficit and government debt is that:
A)a deficit is the amount by which government spending exceeds tax revenues, whereas debt is the sum of money the government owes.
B)debt is the amount by which government spending exceeds tax revenues, whereas a deficit is the sum of money the government owes.
C)a deficit is measured as of a particular time, whereas debt is measured over time.
D)a deficit harms the economy, whereas debt improves the economy.

Question

Quizplus · Accepted Answer

A budget deficit is the amount by which government spending exceeds tax revenues in a given year, while government debt is the cumulative total of all past budget deficits minus past surpluses. In other words, a deficit measures the shortfall for a particular year while debt represents the total amount owed over time. Therefore, option A is correct. Option B is incorrect because it confuses the two terms. Option C has a partial truth to it but is not a good choice as it does not fully address what these two terms mean. Option D is completely incorrect as a deficit is often seen as a negative thing whereas debt is typically viewed as having both positive and negative implications depending on the context.

The Difference Between a Budget Deficit and Government Debt Is