Question

This Question: 1 pt 21 of 24 (18 complete) This Test: 30 pts possible Suppose the government starts with a debt of $0. Then in year 1, there is a deficit of $100 billion, in year 2 there is a deficit of $60 billion in year 3 there is a surplus of $40 billion and in year 4 there is a deficit of $20 billion What is government debt at the end of year 4? OA. $140 billion O B . $180 billion O C. $20 billion OD. somewhat greater than $220 billion, depending on the interest rate OE. somewhat greater than $140 billion, depending on the interest rate

Answer 1

Answer is

option A $140 Billion.

Debt at initially = $0 Defict in st year = $100 17 Billio 2nd year = $60B 3rd year $ 40) B (as there is a surplus ! it will be negative qod year = $20B L while counting deficit At the end of 4th year total definit = $100+$60 (-40) +$(20) T= $140 Billion QM