Question

Econo Nation started 2013 with no national budget debt or surplus. By the end of 2013, it had a budget surplus of $286 million; in 2014, it had a budget deficit of $425 million; in 2015, it had a budget surplus of $100 million, and the amount of its budget deficit or surplus in 2016 is unknown. If at the end of 2016, Econo Nation’s national debt totaled $52 million, determine the deficit or surplus in 2016. Instructions: Enter your answer as a whole number and include a negative sign if there is a deficit. Period Deficit (-) or surplus (+) Debt Beginning of 2013 $0 End of 2013 $286 million 2014 -$425 million 2015 $100 million End of 2016 million $52 million

Answer 1

Answer:

-$13 million

Explanation:

Given that,

Budget surplus by the end of 2013 = $286 million

Budget deficit in 2014 = $425 million

Budget surplus in 2015 = $100 million

Budget deficit or surplus in 2016 is unknown.

National debt at the end of 2016 = $52 million

National Budget surplus/ deficit at the end of year 2015:

= Budget balance of 2013 + Budget balance of 2014 + Budget balance of 2015

= $286 million + (-$425 million) + $100 million

= -$39 million

So the government will fund this deficit by taking debt of $39 million.

National debt at the end of 2016 = Total debt till 2015 + Surplus/deficit for year 2016

-$52 million = (-$39 million) + Surplus/deficit for year 2016

- $52 million + $39 million = Surplus/deficit for year 2016

-$13 million = Surplus/deficit for year 2016

This is budget deficit of $13 million because debt increased by 13 million in 2016.