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.

---

Definitions:

Domestic Price

The price of goods or services within a country’s borders, as opposed to international or foreign prices.

Export

The selling of goods or services produced in one country to buyers in another country.

Autarky Price

The autarky price is the price of a good in a country that is completely self-sufficient and does not engage in international trade for that good.

Total Surplus

The sum of consumer surplus and producer surplus in a market, a measure of the overall economic benefit to society.