If the net public debt declined last year, then which of the following most likely occurred during that year?
A) The government's budget was balanced.
B) The government experienced a budget surplus.
C) The government experienced a budget deficit.
D) The share of foreign holdings of the government's debt increased.

Question

Quizplus · Accepted Answer

A decline in net public debt indicates that the government's total debt decreased. This could have occurred due to either a decrease in overall spending or an increase in revenues. If the government experienced a budget surplus, it means that its revenues exceeded its expenditures, and therefore there was a decrease in net public debt.

If the Net Public Debt Declined Last Year, Then Which