In the 1980s there was much debate in the US concerning "twin deficits". This refers to simultaneous deficits in
A) the current account and capital account
B) the capital account and the government's budget
C) the current account and the government's budget
D) the current account and the financial account
E) the financial account and the government's budget

Question

Quizplus · Accepted Answer

Twin deficits refer to simultaneous deficits in the current account (which measures the flow of goods and services between countries) and the government's budget (which measures the government's revenue and spending). A deficit in the current account means that a country is importing more than it is exporting, while a deficit in the government's budget means that the government is spending more than it is collecting in revenue. The twin deficits of the 1980s were a cause for concern because they suggested that the US was relying too heavily on borrowing from abroad to finance its government spending and consumption.

In the 1980s There Was Much Debate in the US