In a Time of Inflation When the Real (I

question 28

Multiple Choice

In a time of inflation when the real (i.e., deflated) value of the government debt is constant, the conventionally:

• A)reported government budget will show a deficit equal to the inflation rate times the outstanding debt.
• B)reported government budget will show a deficit equal to less than the inflation rate times the outstanding debt.
• C)reported government budget will be balanced.
• D)measured government budget will show a surplus equal to the inflation rate times the outstanding debt.