How is the public debt calculated?

Question

Quizplus · Accepted Answer

The public debt is calculated by cumulating the difference between tax revenues and government spending over the years. This is commonly referred to as the budget deficit, and the accumulation of those deficits over time constitutes the public debt. Option A is incorrect because calculating the public debt does not involve subtracting the government's total liabilities from its total assets. Option B is incorrect because cumulating the annual government purchases over time does not provide an accurate measure of the public debt. Option C is incorrect because subtracting current government spending from current government tax revenues only gives the current budget deficit and not the cumulative public debt.

How Is the Public Debt Calculated