The Australian official and inflation- adjusted fiscal balance measures since 1990 have been close because:
A) inflation and net government debt have been high.
B) nominal interest rates and net government debt have been low.
C) inflation and net government debt have been low.
D) inflation and real interest rates have been high.
E) inflation and real interest rates have been low.

Question

Quizplus · Accepted Answer

Inflation and net government debt have been low, so the effect on the fiscal balance measure from adjusting for inflation is minimal. This means the nominal and inflation-adjusted measures will be close to each other.

The Australian Official and Inflation- Adjusted Fiscal Balance Measures Since