Due to the recent recession, the government is predicting a deficit for the first time in over a decade. It had originally predicted a surplus for the upcoming year. What impact will this have on the federal debt?
1) Federal debt will increase by the amount of the deficit.
2) Federal debt will decrease by the amount of the deficit.
3) Federal debt will decrease by the amount of the surplus originally expected.
4) Federal debt will increase by the amount of the surplus originally expected.
