Question

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

The federal government has a balanced budget.

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

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 surplus in the budget.

Answer 1

The national debt decreases when the federal government has a budget surplus.

- Balanced budget: debt stays the same.
- Any deficit (even a smaller one): debt still increases.