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:

Demand Curve

A graphical representation showing how the quantity demanded of a commodity changes with changes in its price, typically depicting an inverse relationship.

Budget Line

A graphical representation showing the combination of goods a consumer can purchase with a given income.

Money Income

The total amount of monetary earnings received by an individual or household in a specific period, including wages, salaries, and other forms of income.

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, helping to illustrate preferences and the concept of utility.