The correct measure of the deficit is represented by which of the following expressions?
A) uB + G - T.
B) rB - G + T.
C) iB - G - T.
D) (i - u)B + G - T.
E) iB + T - G.

Question

Quizplus · Accepted Answer

The correct measure of the deficit is represented by the expression (i - u)B + G - T, where i is the interest rate, u is the unemployment rate, B is the budget, G is government spending, and T is tax revenue. This formula accounts for the cost of borrowing (interest payments on the budget or national debt), adjusted for the unemployment rate, and the difference between government spending and tax revenue.

The Correct Measure of the Deficit Is Represented by Which