The official measure of the deficit becomes more inaccurate as:
A) the total debt falls.
B) investment rises.
C) taxes rise.
D) government spending rises.
E) the inflation rate rises.

Question

Quizplus · Accepted Answer

The official measure of the deficit becomes more inaccurate as the inflation rate rises. This is because inflation erodes the value of money over time, making nominal deficit figures less reflective of the true economic impact or purchasing power of the deficit. Higher inflation can distort the real value of government borrowing and spending, leading to inaccuracies in the reported deficit figures.

The Official Measure of the Deficit Becomes More Inaccurate As