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Course: Macroeconomics > Unit 5

Lesson 5: Deficits and debts

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Deficits and debts

Google Classroom

The government of Cloud City spent

$ 100

million more than it had in tax revenues this year.

What is the impact of this shortage on the budget balance and national debt in Cloud City?

(Choice A)
There is a budget surplus; no impact on the national debt
(Choice B)
There is a budget surplus; national debt will decrease
(Choice C)
There is a balanced budget; national debt will increase
(Choice D)
There is a budget deficit; the debt will increase
(Choice E)
There is a budget deficit; no impact on the national debt