Its easy to confuse the federal deficit with the federal debt. Well work out an example to

It€™s easy to confuse the €œfederal deficit€ with the €œfederal debt.€ We€™ll work out an example to make the differences clear. To keep the math simple, we€™ll falsely assume that in this land of Barrovia, the government can borrow from the public at an interest rate of 0%€”so there is no interest on the debt. We will also assume that the government is unwilling to print money to finance its budget, so the only way to finance a deficit is by borrowing. The debt inherited from 2011 is 4,000 credits (C4,000, in the local notation). Fill in the accompanying table.
The relationship between deficits and debts is similar to the relationship between investment and the capital stock, which we investigated back in Chapters 27 and 28: The first is a €œflow,€ while the second is a €œstock€; the first is like a river, while the second is like a lake.

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R Spending Deficit C20 C50 Debt C4,020 Year 2012 2013 2014 2015 2016 Revenue C100 C80 C110 C120 C120 C120 C130 C140 C150 C160