Explain the connection between a government budget deficit and a government debt.Choose the correct statements.1. Government debt is the sum of past deficits minus the sum of past surpluses.2. Canada's government debt-to-GDP ratio has increased every year since 1974.3. Canada's federal government debt has never exceeded 100 percent of GDP.4. Government debt is the total amount of government borrowing.OA. Statements 2 and 4 are correct.OB. Statements 1 and 4 are correct.OC. Statements 1 and 3 are correct.OD. Statements 2 and 3 are correct.

The correct answer is B. Statements 1 and 4 are correct.Government budget deficitA budget deficit…

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Explain the connection between a government budget deficit and a government debt.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...

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Question

Explain the connection between a government budget deficit and a government debt.
Choose the correct statements.
1. Government debt is the sum of past deficits minus the sum of past surpluses.
2. Canada's government debt-to-GDP ratio has increased every year since 1974.
3. Canada's federal government debt has never exceeded 100 percent of GDP.
4. Government debt is the total amount of government borrowing.
OA. Statements 2 and 4 are correct.
OB. Statements 1 and 4 are correct.
OC. Statements 1 and 3 are correct.
OD. Statements 2 and 3 are correct.

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