The term "twin deficits" describes an economic situation where a country has simultaneously a fiscal deficit (government spending exceeds government revenue) and a current account deficit (a country's total value of imports of goods, services, income, and transfers exceeds its total value of exports of the same). These two deficits are often linked; a large fiscal deficit can contribute to a current account deficit, for example, by increasing aggregate demand or requiring the government to borrow from abroad.
Twin deficit basically refers to
Asked in PPSC CS Prelims 2013 · Topic: Fiscal Policy & Revenue (Fiscal Deficits: Concepts, measures, and financing of deficits)
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Answer: D. Situation of large current account and fiscal deficit
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