AP Macroeconomics / Unit 5: Long-Run Consequences of Stabilization Policies
5.4 Government Deficits and the National Debt
Notes
- Budget deficit: spending > revenue in a year. Surplus: the reverse.
- National debt: accumulated deficits minus surpluses.
- Expansionary fiscal policy usually increases the deficit.
Practice
The national debt is:
A stock, not a flow.
Cutting taxes without cutting spending usually:
Less revenue.
A balanced budget means:
Deficit of zero.
Ready for more? Take the Unit 5 test.