Which of the following is true about the occurrence of the twin deficits?
A)They always occur together.
B)They only occur when exchange rates are fixed.
C)They did not occur in Canada between 1997 and 2007.
D)They occur consistently in all the economies of the world except Canada.
E)They only occur during large expansions.

Question

Quizplus · Accepted Answer

The twin deficits refer to the situation where a country experiences both a fiscal deficit and a current account deficit simultaneously. However, their occurrence is not absolute or consistent across all conditions mentioned in the other options. The statement about Canada not experiencing twin deficits between 1997 and 2007 is true, illustrating that twin deficits do not always occur together or under specific economic conditions universally.

Which of the Following Is True About the Occurrence of the Twin