Question

What is the difference between the federal budget deficit and federal government​ debt?

Answer 1

Answer:

C) The federal budget deficit is the​ year-to-year short fall in tax revenues relative to government spending ​ (T < G​ + TR), financed through government bonds. The federal government debt is the accumulation of all past deficits.

Explanation:

Budget Deficit by definition is the shortfall in the budget as spending exceeds the budgeted tax revenues for the governments. They are indeed funded by government borrowing by issuing of bonds and borrowing money from the federal reserve.

The federal government debt or also called the national debt is the net accumulation of all the borrowed amount that is used by the government to deficit finance the budget in the current year and the previous years.

In return if a budget in a year turns surplus, that is the spending is less than revenue, it can help lower the national debt if the government policies allow.

Hope that helps.

Answer 2

Answer: A.

Explanation:

Government deficit normally occurs when governments expenditure is more than revenue for a particular year, leading to loss.

While government debt is the totality of all previous outstanding payment both external or domestic.