Question

A country has been in existence for only two years.

In the first year, receipts were $1.0 million and outlays were $1.5 million.

In the second year, receipts were $1.5 million and outlays were $2.0 million.

At the end of the second year, the government had issued debt worth______

Answer 1

-1.0 million

Step-by-step explanation:

the debt issued in the second year is equal to the sum of the excess of revenues over outlays

in year 1, debt = $1.0 million - $1.5 million = $-0.5 million

In year 2, debt = $1.5 million - $2.0 million = $-0.5 million

$-0.5 million + $-0.5 million = -1.0 million