The "official measure" of the deficit (the one reported by the government)
A)tells us the change in government nominal debt.
B)is equal to nominal interest payments on the debt plus the primary deficit.
C)overestimates the real budget deficit whenever the inflation rate is positive.
D)all of the above
E) none of the above

Question

Quizplus · Accepted Answer

The "official measure" of the deficit includes all the elements mentioned: it reflects the change in government nominal debt, comprises nominal interest payments on the debt plus the primary deficit, and tends to overestimate the real budget deficit when there is positive inflation.

The "Official Measure" of the Deficit (The One Reported by the Government)