What has been the average percentage of the U.S. government's budget deficit compared to real GDP since 1970?

The answer indicating that the average percentage of the U.S. government's budget deficit compared to real GDP has averaged approximately 3% since 1970 is correct because historical data shows that the federal budget deficit as a percentage of GDP has fluctuated due to various economic circumstances, including recessions, wars, and fiscal policies, but has generally stabilized around this average.

This percentage reflects how much more the government spends than it earns in revenue, relative to the size of the economy. Over the decades, significant events such as the 2008 financial crisis and other economic stimuli have caused temporary spikes in the deficit, but when examined over a longer period, the average aligns closely with the 3% figure.

The other options do not accurately represent the historical data: While deficits do often vary year by year, they do not alternate consistently from positive to negative. The notion that the deficit has hovered around 40% is an overstatement, as such a high percentage is not supported by historical data. Lastly, while there have been years with negative balances, stating that deficits have predominantly been negative fails to recognize the complexity of the budget cycle and the variations over time.