Budget Deficit Budget Surplus SBillion 100 150 50 120 80 6

Budget Deficit (-) Budget Surplus (+) SBillion 100 150 50 120 -80 60 30 40 Descriplion Year 2011 012 013 2014 2015 2016 201/ 2018 t issued bonds to finance the deficit Government issued bonds to finance the deficit Government used the suplus to buy back soe of the bonds it had issued in 2011 and 2012 Guverrmen issued bonds lo finance lhe deficil Government printed moncy to finance the deficit Government used the suplus to buy back some of the bonds it had issued in previous years Government issued bonds to finance the deficit Government issued bonds to finance the deficit

Solution

Ans

It is simply equal to different between positive and negative values. Negative values here mean Govt incurs debt and positive sign means Govt pays back debt

= 50+60-100-150-120-80-30-40=110-520= - 410. So debt is 410