National Debt and the Federal Budget Quick Check

Question

2 of 52 of 5 Items

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

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

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

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

Answer 1

The correct response is:

The federal government has a surplus in the budget.

When the government has a surplus, it means that it is bringing in more revenue than it is spending. This excess revenue can be used to pay down existing national debt, thereby decreasing it.