Question

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

Answer 1

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

2) incomplete question

Step-by-step 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