Suppose that a country has no public debt in year 1 but experiences a budget deficit of $20 billion in year 2, a budget deficit of $20 billion in year 3, a budget surplus of $10 billion in year 4, and a budget deficit of $2 billion in year 5.

1. What is the absolute size of its public debt in year 5? $Billion?2. If its real GDP in year 5 is $104 billion, what is this country

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Business

Carina Madden

4 January, 01:54

Suppose that a country has no public debt in year 1 but experiences a budget deficit of $20 billion in year 2, a budget deficit of $20 billion in year 3, a budget surplus of $10 billion in year 4, and a budget deficit of $2 billion in year 5.

1. What is the absolute size of its public debt in year 5? $Billion?2. If its real GDP in year 5 is $104 billion, what is this country

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Answers (1)

Know the Answer?

Nola Rush · Answer 1

1) this country's public debt = $42 billion

2) incomplete question

Explanation:

A budget deficit is the difference between a country's income and its expenditures, a deficit occurs when expenditures are larger than revenues. The public debt would be the accumulation of all the country's budget deficits or surpluses.

public debt = - $20 - $30 + $10 - $2 = - $42 billion