Asked by Kiana Despabiladero on Jun 13, 2024
Verified
The federal debt is a stock variable that measures the net accumulation of prior federal deficits.
Federal Debt
A stock variable that measures the net accumulation of annual federal deficits.
Stock Variable
A measure of a quantity at a particular point in time, contrasting with flow variables, which are measured over a period of time.
Federal Deficits
The amount by which government spending exceeds revenue over a period, usually a fiscal year.
- Appreciate the distinction between stock and flow variables in economic analysis, particularly in the context of national debt and deficits.
Verified Answer
YI
Yahiya Ibrahim HaidaraJun 15, 2024
Final Answer :
True
Explanation :
The federal debt is the total amount of money that the federal government owes to various creditors as a result of past borrowing to finance expenditures that exceeded revenue. It is a stock variable because it represents the cumulative effect of all past deficits and surpluses.
Learning Objectives
- Appreciate the distinction between stock and flow variables in economic analysis, particularly in the context of national debt and deficits.