What two measures of macroeconomic activity are often referred to as the "twin deficits"?
A)net capital flows and net exports
B)the foreign exchange deficit and net foreign investment
C)the budget deficit and net exports
D)the saving-investment deficit and the export deficit
E)household and corporate debt

Question

Quizplus · Accepted Answer

The two measures of macroeconomic activity often referred to as the "twin deficits" are the budget deficit (government spending exceeds revenue) and net exports (exports minus imports). The term "twin deficits" implies that these deficits are closely related and can exacerbate each other. For example, a budget deficit may lead to higher interest rates, which can make a country's exports less competitive and result in a larger trade deficit.

What Two Measures of Macroeconomic Activity Are Often Referred to as the "Twin