The Government Budget Constraint Tells Us That the Budget Deficit

question 64

Multiple Choice

The government budget constraint tells us that the budget deficit is equal to

• A)interest on the debt.
• B)the primary deficit.
• C)the primary deficit plus interest on the debt.
• D)imports minus exports.
• E) the primary deficit plus the trade deficit plus interest on the debt.

---

Definitions:

Cash Payments

Transactions that involve the outflow of cash to settle obligations or purchase goods and services.

Cost of Merchandise Sold

The total cost of goods that have been sold during a specific period, including purchase price, transportation, and handling charges, less any discounts or allowances.

Cash Payment

The act of settling a debt or paying for goods or services with cash or equivalent instruments, such as checks.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from operating activities is used instead of adjustments to net income.