An economy has a debt of $50 billion at the beginning of the year. Tax revenues, net of transfers, are $10 billion while government spending is $15 billion. At the end of the year, the debt is $55 billion.

Question

Quizplus · Accepted Answer

The economy's debt increased by $5 billion ($15 billion in spending minus $10 billion in revenues), matching the increase from $50 billion to $55 billion.

An Economy Has a Debt of $50 Billion at the Beginning