Final answer:
A budget deficit will increase the national debt, while a balanced budget won't have any impact on it, and a budget surplus can help to reduce it. The government borrows money to cover a deficit, contributing to the national debt.
Step-by-step explanation:
The question pertains to the impact of different budget scenarios on the national debt. A budget deficit occurs when a government spends more than it earns in revenue. Considering this, the correct answer to the question is that a budget deficit will increase the national debt.
This is because the government will need to borrow money to cover the shortfall between its revenues and its expenditures, thus adding to the national debt. In contrast, a balanced budget, where government revenues equal expenditures, does not increase the debt. A budget surplus, where revenues exceed expenditures, can be used to pay down the national debt.
Universal generalizations suggest that deficit spending has contributed to creating the national debt. Moreover, decisions to maintain economic policies for growth, stability, and full employment affect annual federal budgets and consequently, the national debt.