Correct Answer: A budget deficit is the difference between government spending and revenue in a given year, while the national debt is the accumulation of all previous deficits

Solution : The correct answer is (a). A budget deficit is the difference between government spending and revenue in a given year, while the national debt is the accumulation of all previous deficits.

A budget deficit occurs when a government's expenditures exceed its revenues in a specific fiscal year. It represents the shortfall between what the government spends and what it collects in taxes and other sources of revenue during that period. A budget deficit is typically financed through borrowing, such as issuing government bonds.

The national debt, on the other hand, is the cumulative total of all past budget deficits and surpluses. It represents the accumulated amount of money the government owes due to ongoing deficits over time. The national debt increases when the government runs budget deficits and decreases when it runs budget surpluses. The national debt is the outstanding balance of the government's borrowing over the years.

In summary, a budget deficit is a shortfall in a specific fiscal year, while the national debt is the accumulation of all previous deficits.