Which of the Following Statements Is TRUE About the Difference

question 75

Multiple Choice

Which of the following statements is TRUE about the difference between the public debt and the government budget deficit?

• A) The public debt always increases while the government budget deficit may increase or decrease.
• B) The public debt for this year will increase or decrease depending upon whether there is a government budget deficit or a government budget surplus.
• C) The public debt is a flow measure and the government budget deficit is not a flow measure.
• D) There is no relationship between the public debt and the government budget deficit since one is a stock measure and the other is a flow measure.

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Definitions:

Nominal Consideration

A token amount in a contract to validate it, which may not necessarily reflect the true value of the contract's subject matter.

Consideration

Something of value (such as money, service, promise, or goods) that is given by both parties to a contract that compels mutual obligation.

Charitable Purpose

involves activities carried out for the benefit of the public, such as alleviating poverty, advancing education, religion, or other activities serving the public interest.

Promised Gift

A commitment to transfer ownership of an item or property to someone else without expecting something in return.