Total debt owed by the federal government due to past borrowing.

Total debt owed by the federal government due to past borrowing.

• A. Budget deficit
• B. National debt
• C. Entitlements
• D. Deregulation

Answer: (B)

National debt represents the total amount the federal government owes from past borrowing. It grows whenever the government runs a deficit, because borrowing to cover the shortfall adds to the stock of debt. In other words, debt is a cumulative total—money borrowed in prior years that remains outstanding, including what is owed to the public and to itself through intra-governmental accounts. The budget deficit, by contrast, is how much spending exceeds revenue in a single year; it is a flow that, if repeated, contributes to the rising debt. Entitlements are mandatory spending programs such as Social Security and Medicare; they are not the debt itself, though their costs influence future deficits. Deregulation is policy aimed at reducing rules and has no direct relationship to measuring the government's debt.

National debt represents the total amount the federal government owes from past borrowing. It grows whenever the government runs a deficit, because borrowing to cover the shortfall adds to the stock of debt. In other words, debt is a cumulative total—money borrowed in prior years that remains outstanding, including what is owed to the public and to itself through intra-governmental accounts. The budget deficit, by contrast, is how much spending exceeds revenue in a single year; it is a flow that, if repeated, contributes to the rising debt. Entitlements are mandatory spending programs such as Social Security and Medicare; they are not the debt itself, though their costs influence future deficits. Deregulation is policy aimed at reducing rules and has no direct relationship to measuring the government's debt.