The official measure of the deficit:
A) depends on the nominal interest rate.
B) depends on the real interest rate.
C) always underestimates the correct measure of the deficit when inflation is positive.
D) differs from the correct measure by the inflation rate times taxes.
E) differs from the correct measure by the inflation rate times government spending.

Question

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The Answer of The official measure of the deficit:
A) depends on the nominal interest rate.
B) depends on the real interest rate.
C) always underestimates the correct measure of the deficit when inflation is positive.
D) differs from the correct measure by the inflation rate times taxes.
E) differs from the correct measure by the inflation rate times government spending.

The Official Measure of the Deficit