The phrase "twin deficits" refers to
A)a country's trade deficit and its government budget deficit.
B)the fact that if a country has a trade deficit, its trading partners must also have trade deficits.
C)the equality of a country's saving deficit and its investment deficit.
D)a country's trade deficit and its net capital outflow deficit.

Question

Quizplus · Accepted Answer

Twin deficits refer to the combination of a trade deficit and a government budget deficit. This means that a country is importing more goods and services than it is exporting, while also spending more money than it is bringing in through taxes and other sources of revenue. This can lead to economic instability and may require the government to borrow money to finance its spending, potentially leading to higher interest rates and inflation.

The Phrase "Twin Deficits" Refers to