A deficit adjusted for inflation should include only government spending to pay _____ interest payments.

Question

Quizplus · Accepted Answer

When adjusting for inflation, it is important to use real values rather than nominal values. Interest payments should be adjusted based on the actual purchasing power of the currency at the time they were paid, not the nominal value of the payments. Foreign vs. domestic does not impact the inflation adjustment.

A Deficit Adjusted for Inflation Should Include Only Government Spending