How is national debt different than budget deficit?

Question

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.

Quizzma Team · Answer

The correct answer is D . Explanation: National debt is the total amount of money that a government has borrowed over time, which accumulates from annual budget deficits. A budget deficit, on the other hand, is the amount by which a government’s expenditures exceed its revenues in a single fiscal year. Essentially, if the government spends more than it earns in a year, that shortfall contributes to the national debt over time.

How is national debt different than budget deficit?

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