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Which of the Following Word Equations Accurately Records the Relationship

Question 26

Multiple Choice

Which of the following word equations accurately records the relationship between actual, structural, and cyclical deficits?


A) The structural deficit equals the sum of the actual deficit and the cyclical deficit.
B) The structural deficit equals the difference between the actual deficit and its cyclical component.
C) The cyclical deficit matches the actual deficit in the United States because the structural deficit is negligible.
D) The actual deficit represents the sum of the structural and cyclical deficits if the current account of the trade balance is included in the structural component.
E) None of the above.

Correct Answer:

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