Question

In which situation does the national debt decrease?(1 point)
Responses

The federal government has a decrease in the federal deficit from the previous fiscal year but still has a deficit.
The federal government has a decrease in the federal deficit from the previous fiscal year but still has a deficit.

The federal government has a balanced budget.
The federal government has a balanced budget.

The federal government has a surplus in the budget.
The federal government has a surplus in the budget.

The federal government has an increase in the federal deficit from the previous fiscal year.

Answer 1

The national debt decreases in the situation where **the federal government has a surplus in the budget**. When there is a budget surplus, the government collects more revenue than it spends, allowing it to pay down existing debt, thereby reducing the national debt.