Question #41

The US Government has predicted a national deficit of 12.9 per cent of gross domestic product by September 30 and rising. In Tuesday's Budget it was estimated that the Australian Government deficit to GDP ratio would be around 4.9 per cent in the coming fiscal year. The difference arises because

• the overall US Government budget is providing more stimulus than the Australian budget.
• the US economy is larger than the Australian economy.
• the spending gap is higher in the US.

Answer #431

Answer: the overall US Government budget is providing more stimulus than the Australian budget.

Explanation

Please read The size of the deficit should not be the focus or post a comment for further discussion