AP Macroeconomics : How to find deficit spending

Example Questions

Example Question #1 : Deficit Spending

At the beginning of a specified fiscal year, the national debt is equal to $1000. At the end of the fiscal year, the national deficit is equal to$100. The national debt at the end of the fiscal year is equal to ________.

$900$100

$1100$1000

$1100 Explanation: The national debt is the accumulation of national deficits, tabulated every fiscal year. Therefore, if the national debt at the beginning of the year is$1000 and the deficit for that year is $100, the accumulated nation deficit is$1000+$100=$1100.

If you selected $900, you may have subtracted the deficit that year rather than adding it. If you selected$100, you may have mistaken the national deficit for the national debt.

If you selected $1000, you may have forgotten to include the new deficit of$100 into the calculation of national debt.

Example Question #1 : Deficit Spending

The British economist who notably advocated deficit spending in order to pull a nation out of a recession or depression is _________.

Carl Menger

Alfred Marshall