Which of the following statements is true about the difference between the public debt and the government budget deficit?
A) The public debt always increases while the government budget deficit may increase or decrease.
B) The public debt for this year will increase or decrease depending upon whether there is a government budget deficit or a government budget surplus.
C) The public debt is a flow measure and the government budget deficit is not a flow measure.
D) There is no relationship between the public debt and the government budget deficit since one is a stock measure and the other is a flow measure.

Question

Quizplus · Accepted Answer

The public debt changes based on whether there is a budget deficit (which increases debt) or a budget surplus (which decreases debt).

Which of the Following Statements Is True About the Difference