The U.S federal budget deficit is the amount of expenditure in the federal budge

Question

The U.S federal budget deficit is the amount of expenditure in the federal budget, minus the amount of revenue (taxes) in the federal budget. The deficit can be thought of as the rate of change in the U.S. national debt. The current (2012) U.S federal budget deficit is 1.090 trillion per year. Current plans are to reduce the budget deficit by cutting about 1 trillion from spending over the next ten years (that is 0.1 trillion per year for ten years) What will happen to the U.S national debt iver the next ten years if these spending cuts are put in place (assuming no other budgetary or economic changes)?

a) the debt will decrease by about $1Trillion

b) The debt will increase by about $10 Trillion

c) The debt will stay about the same

d) The debt will decrease by about $10 Trillion.

Explanation / Answer

b) The debt will increase by about $10 Trillion

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