Question

Which situations result in an increase in the national debt?
Select the two correct answers.
(2 points)
an increase in intragovernmental debt
a balanced federal budget
an increase in the federal budget's deficit
a decrease in the federal budget's deficit
a decrease in intragovernmental debt
a surplus in the federal budget

Answer 1

- an increase in intragovernmental debt
- an increase in the federal budget's deficit

Explanation: The national debt rises when the government runs a deficit (spending exceeds revenue) and when intragovernmental borrowing increases. Balanced budgets or surpluses do not increase the debt; decreases in deficits or intragovernmental debt reduce or slow debt growth.