How is national debt different than budget deficit? A. They are not different; they are different ways of saying the same thing.
B. National debt refers to the amount of money a government has borrowed in relation to GDP while a budget deficit refers to the money a government owes after receiving tax revenue.
C. National debt is the amount a government has borrowed in a year while a budget deficit is how much a government has over time.
D. National debt is the amount a government has borrowed over time while a budget deficit is how much a government has borrowed in one year.
The correct answer is D.
Explanation: National debt refers to the total amount of money that a government has borrowed over time, which accumulates from years of budget deficits (when a government’s expenses exceed its revenues in a year). In contrast, a budget deficit specifically measures how much a government has borrowed in one fiscal year to cover its expenses when revenues are insufficient. This means that while the budget deficit refers to a short-term financial situation, the national debt is a long-term cumulative figure. Keep up the good work in understanding these important concepts!