The Difference Between the Federal Budget Deficit and the National

question 41

Multiple Choice

The difference between the federal budget deficit and the national debt is that the:

• A)deficit is a stock variable and the debt is a flow variable.
• B)deficit is a flow variable and the debt is a stock variable.
• C)debt includes interest payments and the deficit does not.
• D)deficit can be positive,but the debt cannot.
• E)debt can be negative,but the deficit cannot.

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Definitions:

Mutual Agreement

A mutual agreement is an understanding or arrangement made between two or more parties, usually detailed in a formal contract.

Discharge

The release or termination of a person’s duty, debt, or obligation, effectively relieving them from responsibility.

Novation

The act of replacing one obligation with another, essentially altering the parties, terms, or obligations of a contract.

Quilt

A multi-layered textile traditionally composed of a woven cloth top, a layer of batting or wadding, and a woven back, usually stitched together.