The national debt is
A)a flow variable showing the amount by which the government's spending is greater than its revenues in a given year
B)a stock variable showing the amount by which the government's spending is greater than its revenues in a given year
C)a stock variable measuring the net accumulation of past deficits
D)a flow variable measuring the net accumulation of past deficits
E)none of the above

Question

Quizplus · Accepted Answer

The national debt is a stock variable measuring the net accumulation of past deficits. It represents the total amount of money the government has borrowed over time to finance its spending programs when its revenues were not sufficient to cover them. It is different from the budget deficit, which is a flow variable representing the amount by which the government's spending exceeds its revenues in a given year. The national debt is a cumulative measure of all past deficits and surpluses.

The National Debt Is