Question

At the beginning of 2009, a government had a total debt of $540 billion dollars. Itended 2009 with a $6 billion dollar budget surplus.In 2010, its budget surplus reached $8 billion dollars. What is the total debt of the government equal to at the end of 2010?

A. $554 billion
B. $540 billion
C. $0
D. $14 billion

Answer 1

The answer is B.

Step-by-step explanation:

A budget surplus occurs when government revenue(tax receipts) are greater than government spending.

And a budget deficit occurs when government spending are greater than government revenue(tax receipts.

Government debt is the total amount of debt that a country is owing its creditors(providers of funds).

Surplus is entirely different from government debt. Nothing is said in the question that the debt was repaid.

Therefore, the government debt still remains $540 billion