Suppose that the federal government had a budget deficit of $100 billion in year 1 and $90 billion in year 2, but that it experiences budget surpluses of $40 billion in year 3 and $30 billion in year 4. Also assume that the government uses any budget surpluses to pay down the public debt. At the end of these four years, the Federal government's public debt would have
A. decreased by $120 billion.
B. increased by $120 billion.
C. increased by $260 billion.
D. decreased by $260 billion.
Answer: B
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