Final answer:
The cash-based budget deficit's impact on the federal government's operating cash balance is represented on the Cash Flow Statement. The annual budget deficit itself is the shortfall between revenues and expenditures, not the overall amount owed from past borrowing. Thus, the correct answer is option C.
Step-by-step explanation:
The relationship between the cash-based budget deficit and the change in the federal government's operating cash balance can be seen on the: c) Cash Flow Statement. The annual budget deficit refers to the shortfall when the government's annual revenues are less than its expenses. A budget deficit results in the need for the government to borrow funds, which affects the operating cash balance. The Cash Flow Statement is a financial document that shows the inflows and outflows of cash, and it is where one would primarily look to understand the movement in cash related to budgetary issues such as deficits.
A deficit is the annual budget shortfall between revenues and expenditures. The overall amount owed by the government for past borrowing is referred to as the national debt, not the deficit.