Suppose that the federal government had a budget deficit of $80 billio

Suppose that the federal government had a budget deficit of $80 billion in year 1 and $90 billion in year 2, but that it experiences budget surpluses of $40 billion in year 3 and $20 billion in year 4.

Also assume that the government uses any budget surpluses to pay down the public debt. At the end of these four years, the Federal government’s public debt would have
A) increased by $110 billion. B) decreased by $57.5 billion.
C) increased by $230 billion. D) decreased by $110 billion.

ANSWER

A