542	10-year bond yields in Japan and the US have risen slightly in the last week suggesting that bond markets are demanding increased risk coverage for these assets.
192	A 10 per cent increase in bank reserves will increase the banks' capacity to make loans by a lesser amount because the banks always keep a minimum volume of reserves to allow the payments system to function efficiently.
943	A 3 per cent budget deficit to GDP ratio is more stimulatory than a 1 per cent deficit even if we do not know what the structural and cyclical break down of the aggregate figure is.
627	A balanced budget amendment in the US would ensure that the private sector debt levels would rise in the current circumstances.
2033	A balanced 'budget' fiscal rule eliminates the cyclical sensitivity of the fiscal outcome to the automatic stabilisers.
1396	A 'balanced budget' rule adopted by a national government eliminates the swings in the fiscal balance that arise from the automatic stabilisers.
1080	A basic idea in Modern Monetary Theory (MMT) is that excessive real wage demands by workers can cause mass unemployment.
1934	A basic understanding of Modern Monetary Theory (MMT) would argue that mass unemployment is due to a deficiency in aggregate demand which would then lead one to reject the conclusion that excessive real wage demands by workers can cause such unemployment.
977	A basic understanding of Modern Monetary Theory (MMT) would argue that mass unemployment is due to a deficiency in aggregate demand which would then lead one to reject the conclusion that excessive real wage demands by workers can cause such unemployment.
1622	A basic understanding of Modern Monetary Theory (MMT) would argue that mass unemployment is due to a deficiency in aggregate spending which would then lead one to reject the conclusion that excessive real wage demands by workers can cause such unemployment.
1796	A basic understanding of Modern Monetary Theory (MMT) would leave you to conclude that excessive real wage demands by workers can cause unemployment.
1955	A basic understanding of Modern Monetary Theory (MMT) would leave you to conclude that excessive real wage demands by workers can cause unemployment.
515	A basic understanding of Modern Monetary Theory (MMT) would leave you to conclude that excessive real wage demands by workers can cause unemployment.
416	A budget deficit equivalent to 3 per cent of GDP signals that the government is adopting a less expansionary policy than if the budget deficit outcome was equivalent to 5 per cent of GDP.
340	A budget deficit that is equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a budget deficit outcome that is equivalent to 3 per cent of GDP.
242	A budget deficit that is equivalent to 5 per cent of GDP is always more expansionary in terms of nominal GDP growth than a budget deficit that is equivalent to 3 per cent of GDP but the actual number should not become the policy focus.
1114	A budget surplus equivalent to 1 per cent of GDP ratio necessarily reflects a more contractionary fiscal policy stance than a budget deficit equivalent to 1 per cent of GDP.
517	A budget surplus indicates that the national government is
979	A budget surplus indicates that the national government is
680	A budget surplus indicates that the national government is seeking to slow down aggregate demand.
657	A budget surplus indicates that the national government is trying to slow the economy down and contain inflation.
441	According to the theory of the money multiplier that changes in the monetary base are driven by changes in the money supply.
1303	Accumulating fiscal surpluses driven by large external surpluses in a sovereign fund allows a government more non-inflationary spending space in the future with lower taxes once the resource wealth dissipates and the external sector moves into deficit.
160	A central bank can always maintain zero short-term nominal interest rates.
1734	A central bank can control bank lending by charging an increasing price for providing its reserves to the commercial banks while maintaining its target monetary policy rate.
478	A central bank can control bank lending while maintaining its target monetary policy rate by increasing the price that it charges commercial banks for reserves.
1794	A central bank can easily purchase treasury debt directly to satisfy accounting arrangements relating to the national governments fiscal deficit (that is, \monetise the deficit\) while still targeting a positive short-term policy rate.
276	A central bank can influence bank lending by charging an increasing price for providing its reserves to the commercial banks while maintaining its target monetary policy rate.
919	A central bank cannot simultaneously debt monetise a budget deficit (buy debt from the treasury) and maintain a positive short-term policy rate.
1227	A central bank cannot simultaneously reduce bank lending and maintain a given positive target interest rate by increasing the rate at which it provides reserves on demand to the commercial banks.
1969	A central bank can pay any rate on excess reserves to the commercial banks that it chooses independent of its other monetary policy settings.
357	A central bank can reduce bank lending while maintaining its target monetary policy rate by increasing the rate that provides reserves to the commercial banks.
1156	A central bank could always directly purchase treasury debt to facilitate the government deficit without compromising its monetary policy stance as long as it is running a near zero interest rate policy target.
1008	A central bank running a policy rate of near zero could always directly purchase Treasury debt to facilitate the governments budget deficit without compromising its monetary policy stance.
859	A central bank running a policy rate of near zero could always directly purchase Treasury debt to facilitate the governments budget deficit without compromising its monetary policy stance.
1721	A central bank sets the short-run interest rate and can choose to pay any rate on excess reserves to the commercial banks that it chooses.
644	A central bank sets the short-run interest rate and can choose to pay any rate on excess reserves to the commercial banks that it chooses.
596	A central bank would not be able to directly purchase Treasury debt to facilitate a national government's budget deficit while still targeting a non-zero policy rate.
1438	A characteristic feature of the neo-liberal period has been the declining share of wages in national income in most nations. However it is not necessary for real wages to grow in the coming years to reverse that trend and real wage cuts under austerity programs could result in an increase the wage share.
1013	A characteristic feature of the neo-liberal period has been the declining share of wages in national income in most nations, which in part, meant that economic growth became more dependent on credit to maintain growth in consumption spending. However it is not necessary for real wages to grow in the coming years to reverse that trend and real wage cuts under austerity programs could result in an increase the wage share.
602	A continuous budget deficit leads to public spending building up and an increase in the inflation risk faced by the economy.
1959	A continuous fiscal deficit exposes the economy to inflation risk because the public spending builds up over time.
1198	A continuous fiscal deficit leads to public spending building up and an increase in the inflation risk faced by the economy.
1842	A continuous fiscal deficit leads to public spending building up which while not a problem in the short-run, increases the long-run inflation risk faced by the economy.
479	A coordinated fiscal austerity plan across all nations (aiming to run budget surpluses) would not be possible without impairing growth because it is likely that the private domestic sector in some countries will desire to save overall.
1249	A country can only start to reduce its public debt relative to GDP when the government can run primary fiscal surpluses (that is, government spending net of interest payments on debt is less than taxation).
113	A country that has been running budget surpluses will have less capacity to deal with an economic downturn, despite what mainstream economists say. This is because to maintain spending growth in the face of rising fiscal drag, the private sector would have built up higher levels of debt than otherwise and face increased insolvency risk as a consequence.
218	A currency board requires a nation to have reserves of the anchor currency equivalent to each unit of local currency they issue at the pegged rate. However the national government in the particular country is still the monopoly issuer of its own currency.
1640	A currency-issuing government always has the capacity to ensure there is first-class services to meet the demands of an ageing population.
1314	A currency-issuing government can always ensure there are first-class services to meet the demands of an ageing population if it has the political will.
2435	A currency-issuing government can always ensure there is first-class service provision to meet the demands of an ageing population.
1251	A currency-issuing government can always ensure there is first-class services to meet the demands of an ageing population
1018	A currency-issuing government can always ensure there is first-class services to meet the demands of an ageing population.
896	A currency-issuing government can always ensure there is first-class services to meet the demands of an ageing population.
1340	A currency-issuing government can avoid issuing debt to the private sector when running a fiscal deficit even if the central bank is targeting a positive short-term policy rate.
1274	A currency-issuing government can run a balanced fiscal balance over the business cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
1795	A currency-issuing government can run a balanced fiscal position (spending equals tax receipts) over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
2541	A currency-issuing government does not control the final fiscal outcome in any period.
2077	A currency-issuing government does not control the fiscal outcome.
1324	A currency-issuing government does not have to issue bonds to match its deficit spending. One of the problems of issuing debt to the non-government sector, as opposed to funding the spending via central bank credit, is that it is a form of corporate welfare because it boosts private wealth.
2125	A currency-issuing government, that is, one that issues its own floating currency never faces solvency risk with respect to the debt it issues.
2222	A currency-issuing government that runs a balanced fiscal balance over the economic cycle (peak to peak) must accept that after all the spending adjustments are exhausted, the private domestic balance will average a surplus over the same cycle, if the external balance averages a surplus over the same cycle.
1041	A currency-issuing sovereign government can always provide first-class health care to its ageing citizens if it has the political will.
167	A current account surplus drains aggregate demand because the nation is giving away more of its real resources than it is getting back from foreigners.
1112	A declining budget deficit or increasing budget surplus signals an intention by the government to attenuate the growth in aggregate demand.
1284	A declining budget deficit tells us that the government is pursuing a more contractionary fiscal policy stance.
544	A declining budget deficit tells us that the government is pursuing a more contractionary fiscal policy stance.
2117	Adherence to a 'balanced budget rule', measured over a full economic cycle (peak to peak) will force the private domestic sector balance to run a deficit on average if the external balance is in deficit on average over the same cycle.
1390	Adopting a fiscal rule that requires the government maintain a fiscal balance of zero at all times means that the fiscal outcome is insulated from the impact of the automatic stabilisers.
1026	Adopting a fiscal rule that requires the government maintain an average budget balance over the course of each business cycle would mean its overall budget outcome would be insulated from the impacts of the automatic stabilisers.
1520	Adopting internal devaluation (reducing wages and prices) for nations that cannot adjust their exchange rate (for example, Greece), while harsh, ultimately improves the nation's international competitiveness.
625	A Eurozone nation like Greece that runs a persistent current account deficit cannot sustain rising living standards over time given that the ECB chooses to maintain rigid control of the inflation rate.
306	A Eurozone nation that runs a persistent current account deficit cannot sustain rising living standards over time given that the ECB chooses to maintain rigid control of the inflation rate.
383	A Eurozone nation that runs a persistent current account deficit cannot sustain rising living standards over time given that the ECB chooses to maintain rigid control of the inflation rate.
448	A Eurozone nation that runs a persistent current account deficit cannot sustain rising living standards over time given that the ECB chooses to maintain rigid control of the inflation rate.
2108	A fact that is overlooked by those promoting austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government fiscal balance returns to its appropriate level.
489	A fact that is overlooked by those promoting austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government budget balance returns to its appropriate level.
1503	A fact that is overlooked by those promoting austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government fiscal balance returns to its appropriate level.
740	A falling wage share in national income, a characteristic feature of many advanced nations over the last few decades, indicates that workers' real living standards are being eroded in these countries.
1259	A falling wage share in national income, which has been a characteristic trend in many nations over the neo-liberal period, does not guarantee declining real standards of living for workers.
1552	A fiscal deficit equivalent to 2 per cent of GDP signals that the government is adopting a less expansionary policy stance than if the  fiscal deficit outcome was equivalent to 3 per cent of GDP.
1630	A fiscal deficit equivalent to 3 per cent of GDP is more stimulatory than a deficit equivalent to 1 per cent of GDP< even if we do not know what the structural and cyclical break down of the aggregate figure is.
2041	A fiscal deficit equivalent to 3 per cent of GDP signals that the government is having a less expansionary impact than if the fiscal deficit outcome was equivalent to 5 per cent of GDP.
1594	A fiscal deficit equivalent to 3 per cent of GDP tells us that the government is adopting a less expansionary policy stance than if the fiscal deficit outcome was equivalent to 5 per cent of GDP.
2507	A fiscal deficit equivalent to 3 per cent of GDP tells us that the government is adopting a less expansionary policy stance than if the fiscal deficit outcome was equivalent to 5 per cent of GDP.
2367	A fiscal deficit equivalent to 3 per cent of GDP tells us that the government is adopting a less expansionary policy than if the fiscal deficit outcome was equivalent to 5 per cent of GDP.
1515	A fiscal deficit equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a deficit outcome equivalent to 3 per cent of GDP.
1580	A fiscal deficit means that the stock of government spending is larger than the tax revenue it receives.
2411	A fiscal deficit of 2 per cent of GDP is less expansionary than a deficit of 3 per cent of GDP.
2019	A fiscal deficit that is equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a deficit outcome that is equivalent to 3 per cent of GDP.
1924	A fiscal deficit that is equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a fiscal deficit outcome that is equivalent to 3 per cent of GDP.
2153	A fiscal deficit that is equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a fiscal deficit outcome that is equivalent to 3 per cent of GDP.
1963	A Fiscal Risk index which measures the vulnerability of a nation to public debt default is never applicable to a national government which issues its own floating currency.
509	A Fiscal Risk index which measures the vulnerability of a nation to public debt default is never applicable to a national government which issues its own floating currency.
2413	A fiscal rule at the national government level that required its fiscal balance to be in balance at all times would eliminate swings in the balance driven by the automatic stabilisers.
966	A fiscal rule that forces governments to run budget surpluses each year would equally force the private sector to run deficits and accumulate increasing levels of indebtedness as a result.
1766	A fiscal rule that forces governments to run fiscal surpluses each year would equally force the private sector to run deficits and accumulate increasing levels of indebtedness as a result.
1273	A fiscal surplus indicates that the national government is
1772	A fiscal surplus indicates that the national government is
1935	A fiscal surplus indicates that the national government is
2119	A fiscal surplus indicates that the national government is
2221	A fiscal surplus indicates that the national government is
1968	A fiscal surplus indicates that the national government is trying to slow the economy down and contain inflation.
2204	A fiscal surplus indicates that the national government is trying to slow the economy down and contain inflation.
1741	A fiscal surplus may not suggest that the national government is trying to slow the economy down and contain inflation.
2116	After a deep recession, governments wanting to reduce their unemployment rates should use expansionary fiscal policy such that real GDP growth equals the sum of the labour productivity growth and the labour force growth rate.
508	After a deep recession, governments wanting to reduce their unemployment rates should use expansionary fiscal policy to get real GDP growth back on trend.
181	After a downturn where governments have run large budget deficits, the only way to reduce the stockpile of public debt is for the government to run surpluses in the future.
1810	After economic growth resumes, the government can rely on the automatic stabilisers to return the fiscal balance to its appropriate level.
144	A fundamental understanding that you can draw from modern monetary theory is that if there is mass unemployment and real wage cuts reduce the non-government desire to save in the currency of issue then an employment-creating policy would be to target real wage cuts.
233	Aggregate demand is a crucial determinant of employment and output at each point in time, but the output that has to be purchased is the outcome of long-run trend factors such as technological change and population growth.
1447	Aggregate demand is the sum of all spending components (consumption, investment, government spending, and net exports). In a stock-flow consistent macroeconomics, we know that flows during a period add to relevant stocks. For example, if the flow of consumption spending rose by $200 billion in total in any one year, then if nothing else changes the stock of aggregate demand would rise by the same amount in the first instance (before the multiplier starts to work).
878	Aggregate demand is the sum of all spending components (consumption, investment, government spending, and net exports). In a stock-flow consistent macroeconomics, we know that flows during a period add to relevant stocks. For example, if the flow of consumption spending rose by $200 billion in total in any one year, then if nothing else changes the stock of aggregate demand would rise by the same amount in the first instance (before the multiplier starts to work).
2406	A government can always eliminate unemployment by hiring workers to digs holes and fill them in again each day. But this option will not have the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
2534	A government can always eliminate unemployment by hiring workers to digs holes and fill them in again each day. But this option will not have the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
1954	A government can run a balanced fiscal position over a complete economic cycle (peak to peak) as long as it accepts, that after all the spending and income adjustments are exhausted, that over the same cycle, the private domestic balance will only be in surplus if the external balance is in surplus.
2561	A government desires to reduce the unemployment rate over the next year and gears its macroeconomic policy to maintaining trend real GDP growth, which is 3.5 per cent per annum. If we know that labour productivity is growing at 2 per cent per annum, the labour force is growing at 1.5 per cent per annum, and the average working week is constant in hours, the government will succeed in its aim if real GDP is sustained at the trend.
2267	A government desires to reduce the unemployment rate over the next year and gears its macroeconomic policy to maintaining trend real GDP growth, which is 3.5 per cent per annum. If we know that labour productivity is growing at 2 per cent per annum, the labour force is growing at 1.5 per cent per annum, and the average working week is constant in hours, will the government succeed in its aim assuming real GDP is sustained at the trend?
1170	A government desires to reduce the unemployment rate over the next year and gears its macroeconomic policy to maintaining trend real GDP growth, which is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, will the government succeed in its aim?
1832	A government in any nation that achieves positive net exports can push for a primary fiscal surplus knowing it will not compromise growth.
1806	A government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x (that is, increase private domestic disposable income by $x) and a public spending increase of $x. Which policy option will have the greater initial impact on aggregate spending?
148	A government running a fiscal deficit has to offer sufficiently attractive interest rates on its debt to the private sector which means its borrowing costs rise to market rates. This is contrary to the modern monetary theory insight that deficits drive interest rates down.
1877	A government's fiscal deficit rises despite the government's stated fiscal austerity stance. We can conclude from the evidence at hand that the austerity mantra of the government doesn't correctly describe its fiscal policy stance.
147	A government that issues its own currency is never in danger of becoming insolvent. However, it loses this sovereignty the moment it borrows in a foreign currency.
2324	A government wanting to achieve full employment after a deep recession will succeed if it uses discretionary fiscal policy to ensure real GDP growth gets back on trend.
2461	A government wanting to achieve full employment after a deep recession will succeed if it uses discretionary fiscal policy to ensure real GDP growth gets back on trend.
598	A government wanting to reduce their unemployment rates after a deep recession should use expansionary fiscal policy to ensure real GDP growth gets back on trend.
848	A hallmark of the neo-liberal period has been the declining share of wages in national income which in part meant that economic growth became more dependent on credit to maintain growth in consumption spending. However it is not necessary for real wages to grow in the coming years to reverse that trend. So real wage cuts under austerity programs could increase the wage share.
1751	A hallmark of the neo-liberal period has been the declining share of wages in national income which in part meant that economic growth became more dependent on credit to maintain growth in consumption spending. Increasing the wage share requires a faster rate of growth in real wages in the coming years.
604	A hallmark of the neo-liberal period has been the declining share of wages in national income which in part meant that economic growth became more dependent on credit to maintain growth in consumption spending. Increasing the wage share will require a faster rate of growth in real wages in the coming years.
1464	A hallmark of the neo-liberal period has been the declining share of wages in national income which in part meant that economic growth became more dependent on credit to maintain growth in consumption spending. Increasing the wage share will require that real wages grow in the coming years.
23	Aiming at some budget deficit target (as outlined in the Government's Updated Economic and Fiscal Outlook for the 2008-09 Federal Budget) is futile because
1932	A lack of a close correspondence between the growth of bank reserves and the growth in the stock of money is evidence that credit creation is being tightly constrained.
1065	A larger budget deficit is more stimulatory than a smaller deficit even if the difference between the two is purely accounted for by the automatic stabiliser component.
1200	A leakage from the spending system can occur via taxation, imports or saving which reduces the expenditure multiplier effect of government spending. Another leakage which reduces the expansionary impact of government deficit spending occurs when the government matches the deficit with debt-issuance, the latter act which drains private sector purchasing power.
725	A leakage from the spending system can occur via taxation, imports or saving which reduces the expenditure multiplier effect of government spending. Another leakage which reduces the expansionary impact of government deficit spending on aggregate demand occurs when the government matches the deficit with debt-issuance which drains private sector purchasing power.
2096	A leakage from the spending system can occur via taxation, imports or saving which reduces the expenditure multiplier effect of government spending. Another leakage, which reduces the expansionary impact of government deficit spending on aggregate demand, occurs when the government matches the fiscal deficit with debt-issuance and drains private sector purchasing power.
1964	All voluntary legal constraints aside, the central bank cannot directly purchase treasury debt to facilitate the national governments fiscal deficit (that is, 'monetise the deficit') if it targets a positive short-term policy rate.
157	Almost every nation can achieve full employment if they have sufficient foreign reserves.
1775	Although we are told that a country is running a small current account deficit and that the private domestic sector is saving overall, we are unable to draw any conclusions about the state of the fiscal balance until we know the relative magnitudes of the other balances.
1032	Although we know that a country is running a small current account deficit and that the private domestic sector is saving overall, we are unable to draw any conclusions about the state of the fiscal balance until we know the relative magnitudes of the other balances.
1323	Although we know that a country is running a small current account deficit and that the private domestic sector is saving overall, we are unable to draw any conclusions about the state of the fiscal balance until we know the relative magnitudes of the other balances.
931	Although we know that a country is running a small current account deficit and that the private domestic sector is saving overall, we are unable to draw any conclusions about the state of the fiscal balance until we know the relative magnitudes of the other balances.
2312	A major criticism of mainstream economists of the use of fiscal deficits is that they crowd out productive private spending. That criticism errs because
2100	Americans enjoy a higher material standard of living as a result of the Chinese holdings of US government debt.
731	Americans enjoy a higher material standard of living as a result of the Chinese holdings of US government debt.
31	Among the Australian Government debts are Benchmark Treasury Fixed Coupon Bonds on issue. There are about $A61 billion outstanding and maturing at various dates. Around $A6 billion of them mature in September 2009 and the coupon value (interest rate) is 7.5 per cent. So although the government is not financially constrained
1021	An advantage of budget deficits is that the non-government sector becomes wealthier when a sovereign government issues debt that is purchased by private wealth holders.
2453	An advantage of fiscal deficits is that the non-government sector becomes immediately wealthier because the sovereign government issues debt to private wealth holders.
1930	An application of Modern Monetary Theory (MMT) tells us that the current proposals for a Green New Deal in the US and elsewhere will lead to crowding out of other investment.
1621	A national, currency-issuing government that runs a balanced fiscal outcome (spending equals revenue) over the economic cycle (peak to peak) also has to accept that, after all the spending adjustments are exhausted, their strategy will ensure that households and firms overall spend more than they earn - that is, run down previous savings or accumulate more net debt.
158	A national government budget surplus results from tax revenue exceeding spending and thus can be seen as \forced saving\ (unspent private income). A deficit is the opposite and thus undermines total saving.
976	A national government can run a balanced budget over the economic cycle (peak to peak) as long as it accepts that, after all the spending adjustments are exhausted, their strategy will ensure that households and firms overall spend more than they earn - that is, run down previous savings or accumulate more net debt.
1933	A national government can run a balanced fiscal position (taxes equal spending) over the economic cycle (peak to peak) as long as it accepts that, after all the spending adjustments are exhausted, their strategy will ensure that households and firms overall spend more than they earn - that is, run down previous savings or accumulate more net debt.
1460	A national government that issues its own currency and freely floats it on foreign markets never faces a risk of insolvency.
2182	A national government that issues its own currency and freely floats it on foreign markets never faces a risk of insolvency.
621	A national government that issues its own currency and freely floats it on foreign markets never faces a risk of insolvency.
358	A national government that issues its own currency is not revenue-constrained. However, inflation may render it impossible for the government to use budgetary policy to meet the nominal demands for pensions and health care by an increasing proportion of the population.
1491	A national government which issues its own floating currency is never vulnerable for financial reasons to defaulting on its own outstanding debt.
1078	A national government which runs a balanced budget over the economic cycle (peak to peak) will ensure that households and firms overall spend more than they earn - that is, run down previous savings or accumulate more net debt, once all the national spending and income adjustments are exhausted.
552	A national government would be unable to rely on the central bank purchasing treasury debt to match its budget deficit (that is, \monetise the deficit\) if the central bank is targeting a positive short-term policy rate.
1560	A national government would be unable to rely on the central bank purchasing treasury debt to match its fiscal deficit if the central bank is targeting a positive short-term policy rate.
1364	A national government would be unable to rely on the central bank purchasing treasury debt to match its fiscal deficit (that is, \monetise the deficit\) if the central bank is targeting a positive short-term policy rate.
47	A national spending gap will emerge if desired domestic saving suddenly exceeds domestic investment. The sectoral balances relationship (from the national accounts) shows that
1468	A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.
1962	A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government surplus
2394	A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.
1424	A nation can only start to reduce its public debt to GDP ratio when it succeeds in running primary fiscal surpluses (that is, its spending net of interest payments is less than taxation revenue).
823	A nation can run a current account deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit) as long as the private domestic sector is spending less than they are earning.
1758	A nation can run a current account deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit) but national income changes will force the private domestic sector to be spending more than it is earning.
702	A nation can run a current account deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit) while the private domestic sector is spending more than they are earning.
1770	A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, but national income changes will ensure that the private domestic sector is spending more than it earns and accumulating debt.
1209	A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.
2254	A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.
984	A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.
2551	A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they it is earning.
814	A nation can run a external deficit accompanied by a government sector surplus, which is of a larger proportion to GDP than the external balance), while the private domestic sector is spending less than they are earning.
2286	A nation can run a external deficit accompanied by a larger government sector surplus (expressed as a percentage of GDP), while the private domestic sector is spending less than they are earning.
1135	A nation can run a government sector surplus, which is larger as a proportion to GDP than the external deficit, while the private domestic sector is spending more than they are earning.
1254	A nation can run a government sector surplus, which is larger as a proportion to GDP than the external deficit, while the private domestic sector is spending more than they are earning.
2241	A nation can run a government sector surplus, which is larger as a proportion to GDP than the external deficit, while the private domestic sector is spending more than they are earning.
2391	A nation can run a government sector surplus, which is larger as a proportion to GDP than the external deficit, while the private domestic sector is spending more than they are earning.
2516	A nation can run a government sector surplus, which is larger as a proportion to GDP than the external deficit, while the private domestic sector is spending more than they are earning.
1440	A nation can run an external deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit) as long as the private domestic sector is spending less than they are earning.
1354	A nation can run an external deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.
2522	A nation can run an external deficit and a government surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.
146	A nation could successfully sustain a fiscal strategy that closed the spending gap left by non-government net saving at all times, irrespective of what other nations were doing.
1164	A nation experiences growth in total employment in a particular month in net terms, rising unemployment, and a marginal decline in the labour force participation rate. Taken together this information tells you that
2081	A nation running an external deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit) will soon be in recession unless the private domestic sector is willing to continually increase its overall indebtedness.
1111	A nation running a very small current account deficit with the private domestic sector spending less than its income, will always be running a budget deficit at the current national income level.
1486	A nation that continues to record an external surplus due to strong net exports can safely run a fiscal surplus without impeding economic growth.
436	A nation that has a strong terms of trade (and external surplus) is able to run a budget surplus without necessarily forcing the private domestic sector into deficit. It is sensible under these conditions to invest the surpluses in a sovereign fund which creates more space for non-inflationary public spending in the future.
1241	A nation that issues its own currency and floats it on international foreign exchange markets can never be financially insolvent with respect to the debt it issues.
2444	A nation that issues its own currency and floats it on international foreign exchange markets faces no solvency risk with respect to the debt it issues.
765	A nation that issues its own currency and floats it on international foreign exchange markets faces no solvency risk with respect to the debt it issues.
1583	A nation that manages its currency via a currency board always has to have sufficient foreign reserves to match the outstanding central bank liabilities (reserves and cash outstanding). Under this arrangement it can always guarantee 100 per cent convertibility but has to endure deflationary tendencies unless it runs external surpluses.
1814	A nation that manages its currency via a currency board (for example, Estonia and Latvia) has to have sufficient foreign reserves to match the outstanding central bank liabilities (reserves and cash outstanding). Under this arrangement it can always guarantee 100 per cent convertibility but has to endure deflationary tendencies unless it runs external surpluses.
384	A nation that manages its currency via a currency board (for example, Estonia and Latvia) has to have sufficient foreign reserves to match the outstanding central bank liabilities (reserves and cash outstanding). Under this arrangement it can always guarantee 100 per cent convertibility but has to endure deflationary tendencies unless it runs external surpluses.
219	A nation that runs a currency board has to seek ways to ensure exports exceed imports to avoid a future of domestic stagnation because the monetary base has to shrink every time net exports are negative.
1582	A nation, whose national government runs a balanced fiscal position over the economic cycle (peak to peak) must accept, that after all the spending adjustments are exhausted, its private domestic sector will be increasingly indebted if the nation is running an external deficit over that cycle.
2318	A nation will become more competitive in international trade if:\n<ol>\n<li>(a) Its nominal exchange rate is unchanged, but its inflation rate falls relative to other nations.</li>\n<li>(b) Its nominal exchange rate is unchanged, but its inflation rate rises relative to other nations.</li>\n<li>(c) Its nominal exchange rate appreciates, but its inflation rate is unchanged relative to other nations.</li>\n<li>(d) Its nominal exchange rate depreciates, but its inflation rate is unchanged relative to other nations.</li>\n</ol>
1169	An Australian trade unionist this week has argued that real wages in Australia in some industries are too high and have caused unemployment. From the perspective of Modern Monetary Theory (MMT) he is correct.
183	An economist who believed in Ricardian Equivalence would argue that the boost of retail sales in Australia following the December stimulus package had nothing to do with the $900 cash handout. Households would have merely saved the handout to pay for future tax rises.
1399	An economy is projected to grow in real terms by around 1.5 per cent over the next year. It is also predicted that real GDP per employed person will grow by 1.1 per cent over the same period and that average weekly hours worked will remain more or less constant. Which of the following labour force growth rates would provide the basis for an expectation that the unemployment rate will be lower at the end of the year than at the beginning?
120	A negative overnight interest rate means that the central bank is effectively imposing a fine on or taxing the private banks that hold reserves overnight. This is not inconsistent, however, with the central bank's major role which is to see there are sufficient reserves in the banking system at all times.
2311	An employment buffer stock scheme involves the government offering an infinite demand for labour. This means that
140	An employment guarantee system administered by a national currency-issuing government is not financially sustainable if the entire labour force was working in it because then there would be no-one left to pay taxes.
56	An ever expanding budget deficit is likely to be inflationary
1855	An external surplus is a necessary but not sufficient condition for a nation that wishes to grow during a period of fiscal surpluses and private domestic deleveraging.
856	An external surplus is a necessary but not sufficient condition for a nation that wishes to grow during a period of fiscal surpluses and private domestic deleveraging.
1422	An external surplus is a necessary but not sufficient condition for a nation that wishes to grow during a period when the government is running a fiscal surplus and the private domestic sector is net saving.
1188	An increasing fiscal deficit tells us nothing about the government's policy intentions.
2206	An increasing fiscal deficit tells us nothing about the government's policy intentions.
2487	An increasing fiscal deficit tells us nothing about the government's policy intentions.
616	An indicator of the impact the recession has had on credit creation is the fact that the growth of bank reserves and the growth in the stock of money have not followed a similar path in  recent years. (NOTE: the inclusion of the word not before followed - July 27, 2011 - to reflect valid comments from readers. Original wording was an oversight).
2326	An understanding of Modern Monetary Theory (MMT) allows us to understand that mass unemployment can arise if the growth in real wages are excessive.
2466	An understanding of Modern Monetary Theory (MMT) allows us to understand that mass unemployment can arise if the growth in real wages are excessive.
1995	An understanding of Modern Monetary Theory (MMT) leads to the conclusion that a central bank could still increase interest rates even if the government instructed it to directly purchase treasury debt as an accompanying operation to the governments fiscal deficit.
99	An understanding of modern monetary theory reveals that from a macroeconomic perspective the sovereign government only ever borrows funds that it has already previously spent.
106	An understanding of the way bank reserves interact with the central bank tells us that when the government spends less than it taxes in any period its bank balance at the central bank rises which this gives it more capacity to spend the next period.
275	Any person on income support benefits provided by the national government are living of the hard work of those who pay taxes. We consider this is part of being a civilised society.
1115	Any substantial increase in the monetary base can be sustained only if interest rates are pushed down to low levels, ultimately to zero.
631	A potential problem with running continuous budget deficits is that the spending builds up over time which adds to inflationary pressures.
1245	A potential problem with running continuous fiscal deficits is that the spending builds up over time which adds to inflationary pressures.
1716	A potential problem with running continuous fiscal deficits is that the spending builds up over time which adds to inflationary pressures.
2496	A potential problem with running continuous fiscal deficits is that the spending builds up over time which adds to inflationary pressures.
2120	A program of fiscal austerity, defined as the government running a fiscal surplus, does not necessarily undermine economic growth.
519	A program of fiscal austerity may not undermine attempts by the private domestic sector to reduce its indebtedness.
1615	A program of fiscal austerity (pushing towards surplus) will always undermine attempts by the private domestic sector to reduce its indebtedness when a nation external balance is in deficit.
981	A program of fiscal austerity which drains aggregate demand growth may not undermine attempts by the private domestic sector to reduce its indebtedness.
886	A program of fiscal austerity which yields a budget surplus will always undermine attempts by the private domestic sector to save overall when the nation's exports are less than the sum of their imports and net income flows.
1634	A program of fiscal austerity which yields a fiscal surplus will always undermine attempts by the private domestic sector to save overall when the nation's exports are less than the sum of their imports and net income flows.
745	A program of fiscal austerity will always undermine attempts by the private domestic sector to reduce its indebtedness when the nation exports less than they import (including net income flows).
2410	A public employment guarantee program, which required workers to attend a government centre each day and do jigsaw puzzles, will have the same impact on national income as when a private company hired workers to build cars to meet market demand and are paid an equivalent wage.
994	A public employment guarantee program, which required workers to attend a government centre each day and do jigsaw puzzles, would have no impact on national income.
1784	A public employment guarantee program, which required workers to attend a government centre each day to do jigsaw puzzles, would have no impact on national income.
1147	A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
1498	A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
2250	A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
2448	A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
2547	A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
462	A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
987	A public works program that employs workers to dig deep holes on one day and then fill them in again the next day has exactly the same impact on current economic growth ($-for-$) as a private firm investing in a new factory.
1779	A public works program that employs workers to dig deep holes on one day and then fill them in again the next day makes exactly the same contribution to current economic growth ($-for-$) as a private firm investing in a new factory to build jet airplanes or a new hospital.
527	A recent Bloomberg report on the British economy says that \the government has staked its reputation on eliminating the budget deficit ... by the time of the next election in 2015\. The current deficit to GDP ratio is around 10 per cent. The declining deficit to GDP ratio will signal the discretionary contraction in net public spending.
712	A redistribution of national income towards profits occurs when nominal wages growth lags behind the inflation rate.
51	A return to a fixed exchange rate system would
1099	A rising budget deficit indicates an expansionary shift in government policy and the challenge is to ensure the nominal demand stimulus does not exceed the real capacity of the economy to respond by increasing real output.
467	A rising budget deficit indicates an expansionary shift in government policy and the challenge is to ensure the nominal demand stimulus does not exceed the real capacity of the economy to respond by increasing real output.
580	A rising budget deficit indicates that discretionary fiscal policy is expansionary.
2315	A rising child dependency ratio
123	A rising federal budget deficit indicates the stock of net government spending at that level is also rising to support private saving.
1609	A rising fiscal deficit indicates an expansionary shift in government policy and the challenge is to ensure the nominal demand stimulus does not exceed the real capacity of the economy to respond by increasing real output.
1786	A rising fiscal deficit indicates an expansionary shift in government policy and the challenge is to ensure the nominal demand stimulus does not exceed the real capacity of the economy to respond by increasing real output.
2297	A rising fiscal deficit indicates that discretionary fiscal policy is expansionary.
1601	A rising fiscal deficit is the signal that government policy is becoming more expansionary.
1342	A rising fiscal deficit necessarily indicates that fiscal policy is expansionary.
1850	A rising fiscal deficit tells us that the government is pursuing an increasingly expansionary fiscal stance.
1260	A rising fiscal surplus tells us that the government is imposing austerity on the economy.
2211	A rising fiscal surplus tells us that the government is imposing austerity on the economy.
1325	A rising fiscal surplus, which means the government is increasingly withdrawing more purchasing power from the economy than it is adding, signals that discretionary fiscal policy is contractionary (aiming to reduce total economic activity).
2135	A rising government deficit always indicates an expansionary shift in policy.
1821	A rising government deficit indicates an expansionary shift in policy and the challenge is to calibrate that expansion to ensure nominal demand growth does not exceed the real capacity of the economy to respond by increasing real output.
1986	A rising government deficit indicates an expansionary shift in policy and the challenge is to calibrate that expansion to ensure nominal demand growth does not exceed the real capacity of the economy to respond by increasing real output.
282	A rising government deficit indicates an expansionary shift in policy and the challenge is to calibrate that expansion to ensure nominal demand growth does not exceed the real capacity of the economy to respond by increasing real output.
1862	A rising government deficit indicates that the government fiscal stance is becoming more expansionary.
2134	A rising government deficit will always allow the household sector to increase its saving in nominal terms
1525	A rising government deficit will always allow the private domestic sector to increase its overall saving in nominal terms.
1905	A rising government deficit will always allow the private domestic sector to increase its overall saving in nominal terms.
2332	A rising government deficit will always allow the private domestic sector to increase its overall saving in nominal terms.
2472	A rising government deficit will always allow the private domestic sector to increase its overall saving in nominal terms.
1528	A rising government deficit will always allow the private domestic sector to increase its saving in nominal terms.
1820	A rising government deficit will always allow the private domestic sector to increase its saving in nominal terms.
1931	A rising government deficit will always allow the private domestic sector to increase its saving in nominal terms.
281	A rising government deficit will always allow the private domestic sector to increase its saving in nominal terms.
362	A rising government deficit will always allow the private domestic sector to increase its saving in nominal terms.
609	A rising household saving ratio combined with an external deficit that is draining aggregate demand, doesn't necessarily mean that the budget deficit has to rise to maintain current output growth.
2178	A rising household saving ratio combined with an external deficit that is draining aggregate demand, means that the fiscal deficit has to rise to maintain current output growth.
1466	A rising household saving ratio combined with an stable external deficit that is draining aggregate spending, doesn't necessarily mean that the fiscal deficit has to rise to maintain current output growth.
1858	A rising household saving ratio combined with a rising external deficit that drains aggregate spending, doesn't necessarily mean that the government deficit has to rise to maintain current output growth.
748	A rising level of bank reserves will make it easier for banks to expand credit to the private sector.
1616	A rising level of bank reserves will make it easier for banks to expand credit to the private sector if the demand for loans increases.
1625	A rising public debt ratio during a recession is of no concern because it falls once economic growth resumes.
449	A rising wage share in GDP requires nominal wages to grow faster than inflation.
191	Article 101 of the Maastricht Treaty forbids the monetary financing for public deficits using overdraft facilities or any other type of credit facility with the European Central Bank (or with the central banks of the Member States). However, commercial banks in member states can purchase government bonds in their countries with European Central Bank cash under certain conditions.
2438	As a matter of accounting, the financial assets held by the non-government sector immediately rise $-for-$ when a sovereign government issues debt.
1243	As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt.
1470	As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt.
775	As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt.
906	As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt.
1293	As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt to match its current fiscal deficit.
1410	As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt to the private bond holders.
1870	As a matter of accounting, the net financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt.
98	A single banks can rid itself of excess reserves held with the central bank by lending them into the Interbank market whereas a system-wide reserve excess can be eliminated if consumers withdraw their deposits and spend the money on real goods and services.
1205	As long as employment growth keeps pace with labour force growth, unemployment will not rise.
1564	As long as employment growth keeps pace with labour force growth, unemployment will not rise.
1846	As long as employment growth keeps pace with labour force growth, unemployment will not rise.
2002	As long as employment growth keeps pace with labour force growth, unemployment will not rise.
564	As long as employment growth keeps pace with labour force growth, unemployment will not rise.
929	A sovereign currency-issuing government needs to raise tax revenue to implement and provision its socio-economic agenda.
1352	A sovereign currency-issuing national government cannot generate full employment without taxation.
316	A sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
84	A sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
1844	A sovereign government does not have to issue debt to match any spending above taxation. But the more public debt it voluntarily issues the more difficult it is for banks to attract deposits to initiate loans from.
89	A sovereign government holding foreign currency denominated debt is less exposed to exchange rate movements than a household which uses the currency because the government issues the currency and can credit bank accounts.
392	A sovereign government voluntarily issues debt to the private sector to match its spending. The more public debt it issues
483	A sovereign national government cannot generate full employment without taxation.
307	A sovereign national government can run a balanced budget over the business cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will mirror the external balance. That means a country running an external deficit will have an increasingly indebted private domestic sector.
381	A sovereign national government can run a balanced budget over the business cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will mirror the external balance. That means a country running an external deficit will have an increasingly indebted private domestic sector.
1171	A sovereign national government can run a balanced budget over the business cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
446	A sovereign national government can run a balanced budget over the business cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
1813	A sovereign national government can run a balanced fiscal position over the business cycle (peak to peak) as long as it accepts that, after all the spending adjustments are exhausted, the private domestic balance will mirror the external balance. That means a country running an external deficit will have an increasingly indebted private domestic sector.
2068	A sovereign national government can run a balanced fiscal position over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be able to save overall if the external balance is in surplus.
1603	A sovereign national government can run a balanced fiscal position over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
2268	A sovereign national government can run a balanced fiscal position over the economic cycle (peak to peak) as long as it accepts, that after all the spending adjustments are exhausted, that the private domestic balance will only be in surplus if the external balance is in surplus.
2325	A sovereign national government can run a balanced fiscal position over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus when averaged out over the same cycle.
2465	A sovereign national government can run a balanced fiscal position over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus when averaged out over the same cycle.
574	A sovereign national government has to raise tax revenue to allow it to fulfill its political mandate.
679	A sovereign national government has to tax in order to spend
1724	A sovereign national government requires taxation revenue in order to spend
1537	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
1557	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
1672	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
2027	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
292	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
372	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
437	A sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
207	As soon as adult individuals adopt social norms and start making decisions together which impact on each person in the group, mainstream economic theory becomes irrelevant and the competitive model of decision making and optimisation loses authority. It is only when individuals behave as psychopaths (according to the clinical diagnosis of psychologists) that the mainstream economic theory of choice has any traction at all.
2040	Assume a government is attempting to stimulate the economy via an expansion in the fiscal deficit. The private market orientated advisors tell them to cut taxes and 'privatise' the expansion whereas the more civic-minded advisors argue that there is a need for improved public infrastructure which requires increases in government spending. So imagine that the government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x and a spending increase of $x. Which policy option will have the greater initial impact on aggregate demand?
187	Assume a national government on June 30 in some financial year has an excess of revenue over spending of $100 billion. At the end of the day it decides to \store\ that excess by purchasing $100 billion of financial assets (for example, shares in a telecommunications company). In terms of stock-flow consistency, the government has created a surplus of $100 billion and built an equivalent valued sovereign fund.
926	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the government manages to run a budget surplus equivalent to 1 per cent of GDP. The national income changes associated with these balances would ensure that the private domestic sector was running an overall deficit of 1 per cent of GDP.
1407	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the government manages to run a fiscal surplus equivalent to 1 per cent of GDP (taxes greater than spending). The national income changes associated with these balances would ensure that the private domestic sector was running an overall deficit of 1 per cent of GDP.
1320	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the government manages to run a fiscal surplus equivalent to 1 per cent of GDP. The national income changes associated with these balances would ensure that the private domestic sector was running an overall deficit of 1 per cent of GDP.
1161	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the private domestic sector is currently saving overall 1 per cent of GDP. In this situation, the government must be running
1477	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the private domestic sector is currently saving overall 1 per cent of GDP. In this situation, the government must be running
671	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the private domestic sector is currently saving overall 1 per cent of GDP. In this situation, the government must be running
780	Assume a nation is running an external surplus equivalent to 2 per cent of GDP and the private domestic sector is currently saving overall 1 per cent of GDP. In this situation, the government must be running a budget deficit equal to 1 per cent of GDP.
784	Assume a nation's central bank successfully maintains a zero interest rate policy and recession keeps the inflation rate at zero. Under these circumstances a fiscal austerity program can achieve reductions in the public debt ratio even if the movements in the automatic stabilisers that result from the recession that the austerity causes reduce the growth of tax revenue.
930	Assume a nation's central bank successfully maintains a zero interest rate policy and recession keeps the inflation rate at zero. Under these circumstances a fiscal austerity program can achieve reductions in the public debt ratio even if the movements in the automatic stabilisers that result from the recession that the austerity causes tax revenue to decline.
1818	Assume a nation's central bank successfully maintains a zero interest rate policy and recession keeps the inflation rate at zero. Under these circumstances a program of fiscal austerity can reduce the public debt ratio even if the movements in the automatic stabilisers reduce the growth of tax revenue.
673	Assume a nation's public debt to GDP ratio rises to 100 per cent. The central bank keeps its nominal interest rate at zero and a zero inflation rate persists. Under these circumstances fiscal austerity packages that create recession can still reduce the public debt to GDP ratio, as long as the primary surplus to GDP ratio is greater than the negative GDP growth rate.
1053	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. Iff government spending increases by $X dollars and private investment and exports are unchanged then nominal income will continue growing until the sum of the changes in taxation revenue, import spending and household saving equals $X dollars.
2468	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. If government spending increases by $X dollars and private investment and exports are unchanged, then nominal income will continue growing until the sum of the change in taxation revenue, import spending and household saving rises by $X dollars.
1383	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. It is then true that if government spending increases by $X dollars and private investment and exports are unchanged then nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by $X dollars.
1975	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. It is then true that if government spending increases by $X dollars and private investment and exports are unchanged then nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by $X dollars.
203	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. It is then true that if government spending increases by $X dollars and private investment and exports are unchanged then nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by $X dollars.
2328	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. It is then true that if government spending increases by $X dollars and private investment and exports are unchanged then nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by $X dollars.
330	Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. It is then true that if government spending increases by $X dollars and private investment and exports are unchanged then nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by $X dollars.
1177	Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
1550	Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
2031	Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
2274	Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
487	Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
1790	Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves <strong>overall</strong>, we would always find
1071	Assume that a national is continuously running an external surplus of 1 per cent of GDP. This surplus provides the scope for the government to run a equivalent surplus and still satisfy a desire by the private domestic to save overall.
659	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. If the private domestic sector successfully spends less than its income, then we would always find a public sector deficit.
1742	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. If the private domestic sector successfully spends less than its overall income, then we would always find a public sector deficit.
1949	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
2107	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find
1282	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would find
1461	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would find
2322	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would find
2459	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would find
594	Assume that a nation is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would find
1202	Assume that a nation is running an external deficit of 2 per cent of GDP. Under these circumstances, whether the public sector records a deficit or not depends on how large a surplus the private domestic sector records.
1570	Assume that a nation is running an on-going external deficit of 2 per cent of GDP. If the private domestic sector successfully spends less than its income, then we would always find a public sector deficit being recorded.
1956	Assume that a nation's GDP growth is half a percentage point below its trend rate of growth of 3.5 per cent per annum and labour productivity grows at 1.5 per cent per annum. If average working week is constant in hours and the labour force grows at 2 per cent per annum, then we would observe a rising unemployment rate.
683	Assume that a nation's real GDP growth rate over the next year is 3 per cent and labour productivity grows at 1.5 per cent over the same period. If the the labour force maintains a growth rate of 1.5 per cent per annum and the average working week is constant in hours, then
2057	Assume that a standard monthly Labour Force data release showed that employment grew by only 400 in net terms during the last month. Other highlights were that unemployment rose by 10,700 and that the labour force participation rate fell by 0.1 per cent indicating a rise in the proportion leaving the labour force. Taken together this data tells you that
663	Assume that inflation and nominal interest rates are both constant and zero and a country has a public debt to GDP ratio of 100 per cent. The approach taken by those who support fiscal austerity is to run primary budget surpluses to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy can still work if the economy contracts under the burden of the surpluses.
1572	Assume that inflation and nominal interest rates are both constant and zero and a country has a public debt to GDP ratio of 100 per cent. The approach taken by those who support fiscal austerity is to run primary fiscal surpluses to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy can still work even if the economy contracts under the burden of the surpluses.
1436	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $x dollars and private investment and exports remain unchanged.
1944	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $x dollars and private investment and exports remain unchanged.
1833	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.
2283	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.
573	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.
810	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.
955	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.
1681	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $X if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.
1906	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. In this situation, if government spending increases by $X dollars and private investment and exports are unchanged nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by more than $X dollars because of the multiplier.
1509	Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy settings. Then, if government spending increases by $X dollars and private investment and exports are unchanged, we know, as a result of our understanding of the expenditure multiplier, that nominal GDP will grow until the sum of taxation revenue, import spending and household saving rises by exactly $X dollars.
704	Assume that the current account deficit of a nation is on average over the business cycle equal to 2 per cent of GDP and that the government manages to run a balanced budget when averaged over the same cycle. We can conclude that on average the private domestic sector overall is spending more than it is earning.
1401	Assume that the current account deficit of a nation is on average over the business cycle equal to 2 per cent of GDP and that the government manages to run a balanced fiscal position when averaged over the same cycle. We can conclude that on average the private domestic sector overall is becoming increasingly indebted.
1449	Assume that the current account deficit of a nation is on average over the business cycle equal to 2 per cent of GDP and that the government manages to run a balanced fiscal position when averaged over the same cycle. We can conclude that on average the private domestic sector overall is spending more than it is earning.
1017	Assume that the current account deficit of a nation is stable and equal to 2 per cent of GDP throughout a complete business cycle. The government is imposing fiscal austerity and at a particular point over that cycle we observe a government surplus equal to 3 per cent of GDP but which over the complete business cycle will end up being balanced. We also would know two things about the private domestic sector balance - at the observation point and on average over the cycle. It would be in
2434	Assume that the current account deficit of a nation is stable and equal to 2 per cent of GDP throughout a complete economic cycle. The government is imposing fiscal austerity and at a particular point over that cycle we observe a government surplus equal to 3 per cent of GDP but which over the complete economic cycle will end up being balanced. We also would know two things about the private domestic sector balance - at the observation point and on average over the cycle. It would be in
1828	Assume that the external deficit of a nation is on average over the economic cycle equal to 2 per cent of GDP and that the government balances its fiscal position when averaged over the same cycle. We can conclude that on average the private domestic sector overall
685	Assume that the government increases spending by $100 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current tax rate is equal to 30 per cent (so tax revenue rises by 30 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
799	Assume that the government increases spending by $100 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current tax rate is equal to 30 per cent (so tax revenue rises by 30 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
1418	Assume that the government increases spending by $100 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 2 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current average tax rate is equal to 25 per cent (so tax revenue rises by 25 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
920	Assume that the government increases spending by $100 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 2 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current average tax rate is equal to 25 per cent (so tax revenue rises by 25 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
1131	Assume that the government increases spending by $200 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 2 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current average tax rate is equal to 25 per cent (so tax revenue rises by 25 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
2237	Assume that the government increases spending by $200 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 2 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current average tax rate is equal to 25 per cent (so tax revenue rises by 25 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
2381	Assume that the government increases spending by $200 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 2 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current average tax rate is equal to 25 per cent (so tax revenue rises by 25 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
1950	Assume that the inflation and nominal interest rates both zero and constant. Consider a country with a public debt to GDP ratio of 100 per cent, which the mainstream economists consider to be dangerously high. The mainstream prescription is to run primary fiscal surpluses to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy will only work if there is positive real GDP growth.
1081	Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe
1279	Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe
575	Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe
816	Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe
2287	Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe:\n\nA fiscal deficit equal to 1 per cent of GDP.\nA budget surplus equal to 1 per cent of GDP.\nA budget deficit equal to 5 per cent of GDP.\nA budget surplus equal to 5 per cent of GDP.
1443	Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe:\n\n\n.
1673	Assume that the national accounts of a nation reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe
2179	Assume that total employment grew in a particular month in net terms yet unemployment still rose. You also know that the labour force participation rate fell marginally. Taken together this information tells you that
610	Assume that total employment grew in a particular month in net terms yet unemployment still rose. You also know that the labour force participation rate fell marginally. Taken together this information tells you that
1145	Assume the central bank keeps the inflation rate steady and equal to the nominal interest rate. Under these monetary conditions, a government can push the primary budget balance into surplus and drive down the public debt ratio even if the fiscal austerity causes a recession.
2404	Assume the central bank keeps the inflation rate steady and equal to the nominal interest rate. Under these monetary conditions, a government can push the primary fiscal balance into surplus and drive down the public debt ratio even if the fiscal austerity causes a recession.
2526	Assume the central bank keeps the inflation rate steady and equal to the nominal interest rate. Under these monetary conditions, a government can push the primary fiscal balance into surplus and drive down the public debt ratio even if the fiscal austerity causes a recession.
2248	Assume the central bank keeps the inflation rate steady and equal to the nominal interest rate. Under these monetary conditions, a government can push the primary fiscal balance (the difference between spending and taxation net interest payments) into surplus and drive down the public debt ratio even if the fiscal austerity causes a recession.
742	Assume the central bank keeps the inflation rate steady and equal to the nominal interest rate. Under these monetary conditions it remains true that pushing the primary budget balance into surplus can drive down the public debt ratio even if the fiscal austerity causes a recession.
1612	Assume the central bank keeps the inflation rate steady and equal to the nominal interest rate. Under these monetary conditions it remains true that pushing the primary fiscal balance into surplus can drive down the public debt to GDP ratio even though the fiscal austerity causes a recession.
503	Assume the current public debt to GDP ratio is 100 per cent and that central banks keep nominal interest rates and inflation constant and zero. Governments that promote fiscal austerity claim they can reduce the the public debt to GDP ratio by pushing the primary budget into surplus even if the public spending contraction creates a negative real GDP growth rate. Under the circumstances outlined, this claim is correct.
1490	Assume the current public debt to GDP ratio is 100 per cent and that central banks keep nominal interest rates and inflation constant and zero. Governments that promote fiscal austerity, claim they can reduce the the public debt to GDP ratio by pushing the primary fiscal position (balance net of interest payments on outstanding debt) into surplus even if the austerity cause real GDP growth to fall into recession. Under the circumstances outlined, this claim is correct.
1923	Assume the current public debt to GDP ratio is 100 per cent and that the nominal interest rate and the inflation rate remain constant and zero. Under these circumstances it is impossible to reduce a public debt to GDP ratio, using an austerity package if the rise in the primary fiscal surplus to GDP ratio is always exactly offset by negative GDP growth rate of the same percentage value.
1280	Assume the current public debt to GDP ratio is 100 per cent and that the nominal interest rate and the inflation rate remain constant and zero. Under these circumstances it is impossible to reduce a public debt to GDP ratio, using an austerity package if the rise in the primary surplus to GDP ratio is always exactly offset by negative GDP growth rate of the same percentage value.
252	Assume the current public debt to GDP ratio is 100 per cent and that the nominal interest rate and the inflation rate remain constant and zero. Under these circumstances it is impossible to reduce a public debt to GDP ratio, using an austerity package if the rise in the primary surplus to GDP ratio is always exactly offset by negative GDP growth rate of the same percentage value.
343	Assume the current public debt to GDP ratio is 100 per cent and that the nominal interest rate and the inflation rate remain constant and zero. Under these circumstances it is impossible to reduce a public debt to GDP ratio, using an austerity package if the rise in the primary surplus to GDP ratio is always exactly offset by negative GDP growth rate of the same percentage value.
346	Assume the current public debt to GDP ratio is 100 per cent and that the nominal interest rate and the inflation rate remain constant and zero. Under these circumstances it is impossible to reduce a public debt to GDP ratio, using an austerity package if the rise in the primary surplus to GDP ratio is always exactly offset by negative GDP growth rate of the same percentage value.
578	Assume the current public debt to GDP ratio is 100 per cent and that the nominal interest rate and the inflation rate remain constant and zero. Under these circumstances it is impossible to reduce a public debt to GDP ratio, using an austerity package if the rise in the primary surplus to GDP ratio is always exactly offset by negative GDP growth rate of the same percentage value.
1887	Assume the government increases spending by $100 billion from now and maintains that injection each year for three years. Economists estimate the spending multiplier to be 1.6 and the impact is immediate and exhausted in each year. They also estimate that the import propensity is 0.2 (meaning that imports rise by 20 cents for every dollar generated in the economy) and the current tax rate is equal to 20 per cent. They also estimate that the tax multiplier (impact of tax changes on income) to be equal to 1. The cumulative impact of this fiscal expansion on nominal GDP is
2183	Assume the government increases spending by $100 billion from now and maintains that injection for three years. Economists estimate the spending multiplier to be 1.6 and the impact is immediate and exhausted in each year; imports rise by 20 cents for every dollar generated in the economy; and the current tax rate is equal to 20 per cent. They also estimate that the tax multiplier (impact of tax changes on income) to be equal to 1. Which of the following statements is correct?
623	Assume the government increases spending by $100 billion from now and maintains that injection for three years. Economists estimate the spending multiplier to be 1.6 and the impact is immediate and exhausted in each year. They also estimate that the import propensity is 0.2 (meaning that imports rise by 20 cents for every dollar generated in the economy) and the current tax rate is equal to 20 per cent. They also estimate that the tax multiplier (impact of tax changes on income) to be equal to 1. Which of the following statements is correct?
1920	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the expenditure multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier to be equal to 1 and the current tax rate is equal to 30 per cent (30 cents in the $). What is the cumulative impact of this fiscal expansion on GDP after three years?
246	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier to be equal to 1 and the current tax rate is equal to 30 per cent (30 cents in the $).  What is the cumulative impact of this fiscal expansion on GDP after three years?
1535	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier to be equal to 1 and the current tax rate is equal to 30 per cent (30 cents in the $). What is the cumulative impact of this fiscal expansion on GDP after three years?
1526	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier (which captures the impact of rising tax rates on GDP) to be equal to 1 and the current average tax rate is equal to 30 per cent. What is the cumulative impact of this fiscal expansion on GDP after three years?
2333	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier (which captures the impact of rising tax rates on GDP) to be equal to 1 and the current average tax rate is equal to 30 per cent. What is the cumulative impact of this fiscal expansion on GDP after three years?
2473	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier (which captures the impact of rising tax rates on GDP) to be equal to 1 and the current average tax rate is equal to 30 per cent. What is the cumulative impact of this fiscal expansion on GDP after three years?
364	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier (which captures the impact of rising tax rates on GDP) to be equal to 1 and the current average tax rate is equal to 30 per cent. What is the cumulative impact of this fiscal expansion on GDP after three years?
440	Assume the government increases spending by $100 billion in the each of the next three years from now. Economists estimate the spending multiplier (which is the multiple by which income increases for a given injection of spending) to be 1.5 and the impact is immediate and exhausted in each year. They also estimate that the import propensity is 0.2 (meaning that imports rise by 20 cents for every dollar generated in the economy). They also estimate the tax multiplier (impact of tax changes on income) to be equal to 1 and the current tax rate is equal to 30 per cent. So for every extra dollar produced, tax revenue rises by 30 cents. Which of the following statements is correct?
2000	Assume the government increases spending by $100 billion in year 1, again in year 2 and again in year 3. Economists estimate the spending multiplier to be 1.5 and the impact is immediate and exhausted in each year. They also estimate the tax multiplier to be equal to 1 and the current tax rate is equal to 30 per cent (30 cents in the $). What is the cumulative impact of this fiscal expansion on GDP after three years?
240	Assume there is a situation where private bond markets are driving up yields on long-maturity public bonds. The central bank can always maintain whatever yields the government desires at every maturity. In this situation the central bank could hold yields constant but would be paying
1760	Assuming the expenditure multiplier is greater than 1, deficit spending will have a greater impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
735	Assuming the expenditure multiplier is greater than 1, deficit spending will have a greater impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2238	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit, the net spending injection will have a greatest impact on aggregate spending if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2531	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit they will have a greatest immediate impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
1141	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit they will have a greatest impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2232	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit they will have a greatest impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2388	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit they will have a greatest impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2397	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit they will have a greatest impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2519	Assuming the expenditure multiplier is greater than 1, if the government increases its deficit they will have a greatest impact on aggregate demand if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.
2483	As the sense of emergency surrounding the pandemic seemingly has been forgotten, the European Commission will reinstate the restrictions imposed on deficit and debt ratios by the Stability and Growth Pact, which will increase the solvency risk of the 19 member states.
122	A stock-flow consistent macroeconomic framework shows categorically that as long as net government spending grows in line with GDP, inflation will not be a problem.
734	A strategy to force the government to balance its budget means that the private domestic sector has to be continously accumulating debt overall unless the current account moves into surplus.
2101	A strategy to force the government to maintain a balanced fiscal position that the private domestic sector has to be continuously accumulating debt unless the external account moves into surplus.
1405	A tax increase, which aims to increase tax revenue at the current level of national income by $x, will have a smaller initial negative impact on aggregate demand than a government spending cut of $x?
1689	A tax increase, which aims to increase tax revenue at the current level of national income by $x, will have a smaller initial negative impact on aggregate demand than a government spending cut of $x?
771	A tax increase, which aims to increase tax revenue at the current level of national income by $x, will have a smaller initial negative impact on aggregate demand than a government spending cut of $x?
1754	At present all the EMU member nations face insolvency risk because they use a foreign currency. If one such national government left the Eurozone and re-established its own currency, converted all euro liabilities to that currency, then they would eliminate that risk on all future liabilities issued.
971	At present all the Eurozone member nations face insolvency risk. If any one of them left the Eurozone and re-established its own currency, re-denominated all euro liabilities into their own currency, then they would eliminate that risk on all future liabilities.
356	At present, bank lending is capital-constrained rather than reserve constrained. If the central bank forced banks to maintain a reserve ratio of 100 per cent then lending would also be reserve constrained.
1598	At present, bank lending is capital- rather than reserve constrained. If the central bank forced banks to maintain a 100 per cent reserve ratio then lending would also become reserve constrained.
811	At present Greece (and all the EMU member nations) face insolvency risk because they use a foreign currency (the Euro). By leaving the Euro and issuing their own currencies, these nations would eliminate that risk on all their future liabilities.
694	At present Greece (and all the EMU member nations) face insolvency risk. If Greece left the Eurozone and re-established its own currency, converted all euro liabilities to their own currency, they would eliminate that risk on all future liabilities.
488	At present inflation and nominal interest rates are low and constant) so assume they are both zero and constant. Consider a country with a public debt to GDP ratio of 100 per cent which the mainstream economists consider to be dangerously high. The mainstream prescription is to run primary budget surpluses to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy will only work if there is real GDP growth.
1791	At present inflation and nominal interest rates are low and constant (so for this question, assume they are both zero and constant). Consider a country with a public debt to GDP ratio of 100 per cent, which the mainstream economists consider to be dangerously high. The mainstream prescription is to run primary fiscal surpluses to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy will only work if there is real GDP growth.
874	At present, it appears that the automatic stabilizers are probably providing enough demand stimulus to maintain some growth in most economies. While the proportion of the budget balance that is working in this way is not directly observable, the estimates provided by institutions such as the OECD and the IMF are overly pessimistic.
904	At present, private domestic sectors around the world are locked in a process of deleveraging with private households increasing their saving ratios and firms are declining to invest. To avoid the employment losses arising from this lost private spending, governments need to expand public deficits.
1614	A typical IMF export-led strategy is to propose cutting real wages in order (they say) to improve external competitiveness and pushing the government into fiscal surplus via austerity. The aim is for net exports growth to more than offset the loss of spending arising from fiscal austerity. Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
375	Australian federal election bonus question: Any political party that wants to run a budget surplus when there is an external sector deficit and the private sector is trying to save overall doesn't deserve to be elected to office or to retain office.
2475	Australian workers found out officially this week that the real wage fell 2.7 per cent in the last 12 months. Given the growth in wages (the money you get paid) is lagging behind inflation while labour productivity is growing, then we can conclude that the profit share in GDP must be increasing.
170	Australia's October Labour Force Survey data shows that employment increased by 24,500 thousand persons in the last month by total hours worked in that month fell by about 1.7 per cent. Given GDP growth is now growing again, this means that labour productivity growth (GDP per worker) must have jumped up as well in the last month because less working hours are being required to produce more output.
1311	Automatic stabilisers refer to movements in the fiscal aggregates (spending and taxation), which are sensitive to the cycle in economic activity. In general, the estimates provided by the organisations such as the OECD and IMF of the impact of the automatic stabilisers are biased upwards.
1910	Bank lending is capital-constrained rather than reserve constrained. If the central bank forced banks to maintain a reserve ratio of 100 per cent then lending would also be reserve constrained.
423	Bank lending is capital-constrained rather than reserve constrained. If the central bank forced banks to maintain a reserve ratio of 100 per cent then lending would also be reserve constrained.
1226	Bank lending moved from being reserve-constrained to capital-constrained once the prudential authorities relaxed reserve ratio requirements and the Bank of International Settlements introduced the Basel framework for capital adequacy.
2441	Bank lending moved from being reserve-constrained to capital-constrained once the prudential authorities relaxed reserve ratio requirements and the Bank of International Settlements introduced the Basel framework for capital adequacy.
760	Bank lending moved from being reserve-constrained to capital-constrained once the prudential authorities relaxed reserve ratio requirements and the Bank of International Settlements introduced the Basel framework for capital adequacy.
1052	Bank reserves are maintained to ensure that all the cheques written every day clear when presented. If a bank doesn't have enough reserves then cheques drawn against it will bounce.
2011	Bank reserves are maintained to ensure that all the cheques written every day clear when presented. If a bank doesn't have enough reserves then cheques drawn against it will bounce.
217	Bank reserves are maintained to ensure that all the cheques written every day clear when presented. If a bank doesn't have enough reserves then cheques drawn against it will bounce.
331	Bank reserves are maintained to ensure that all the cheques written every day clear when presented. If a bank doesn't have enough reserves then cheques drawn against it will bounce.
214	Bank reserves play a vital part in the monetary system. One important function they serve is to allow banks to meet short-term demand for credit in times when they are finding it hard to attract deposits.
58	BHP builds its business by borrowing and investing in assets which allow it to earn an economic rate of return. Most commentators applaud this level of entrepreneurship. The analogy
2	Bonds have to be issued by the national governments
589	British real wages have fallen over the last year because the rate of growth in earnings has fallen behind the growth in labour productivity.
2363	Broad money is a multiple of the monetary base which is what the money multiplier concept explains.
2503	Broad money is a multiple of the monetary base which is what the money multiplier concept explains.
3	Budget deficits
4	Budget surpluses
1332	By defining full employment at levels above the minimum unemployment rate that could be sustained in any nation, organisations such as the IMF and the OECD, generate estimates of structural fiscal deficits that are biased downwards.
1288	By draining funds out of the system, government borrowing from the private sector reduces the risk that public deficit spending will overheat the economy.
551	By draining funds out of the system, government borrowing from the private sector reduces the risk that public spending will overheat the economy.
150	By highlighting the sectoral balances version of national income accounting, modern monetary theory shows us that if the fiscal budget was always balanced and the external sector was always in balance, then there could be no domestic saving.
2442	By increasing tax rates a sovereign government increases its capacity to spend more without increasing inflation.
431	By increasing tax rates a sovereign government increases its capacity to spend more without increasing inflation.
763	By increasing tax rates a sovereign government increases its capacity to spend more without increasing inflation.
767	By investing budget surpluses in a sovereign fund a government creates more space for non-inflationary public spending in the future.
2445	By investing fiscal surpluses in a sovereign fund a government creates more space for non-inflationary public spending in the future.
1074	By voluntarily issuing debt to match its net spending and taking funds out of the private sector, governments create more non-inflationary room for themselves to spend.
1651	By voluntarily issuing debt to match its net spending, government borrowing from the private domestic sector reduces, but does not eliminate, the risk that public deficits will be inflationary.
794	By voluntarily issuing debt to match its net spending, government borrowing from the private sector reduces the risk that public deficits will be inflationary.
2131	Central bank balance sheet management aimed at controlling the yields on public debt at all maturities may not have much impact on the term structure during periods of high inflation.
273	Central bank balance sheet management aimed at controlling the yields on public debt at all maturities may not have much impact on the term structure during periods of high inflation.
2039	Central bankers are once again talking about the possible need for more quantitative easing to ease the aggregate spending losses associated with ongoing fiscal austerity programs in some countries. If calibrated correctly, QE can replace the net financial assets destroyed by the austerity.
2474	Central bankers are talking about ending their quantitative easing programs as an anti-inflationary strategy while governments are withdrawing of fiscal stimulus programs. Both policy shifts will destroy net financial assets in the non-government sector.
2334	Central bankers are talking about retaining quantitative easing to ease the aggregate demand losses associated with the implementation of withdrawal of fiscal stimulus programs. If calibrated correctly, QE can replace the net financial assets destroyed by the withdrawal of the fiscal injection.
2006	Central bankers are talking about the possible need for more quantitative easing (QE) as their economies start to slow down. By adding bank reserves, QE is similar to a net fiscal injection in this respect.
1058	Central bankers are talking about the possible need for more quantitative easing to ease the aggregate demand losses associated with the implementation of fiscal austerity programs. However QE cannot be compared to a net fiscal injection because it creates no new net financial assets in the currency of issue.
336	Central bankers are talking about the possible need for more quantitative easing to ease the aggregate demand losses associated with the implementation of fiscal austerity programs. However QE cannot be compared to a net fiscal injection because it creates no new net financial assets in the currency of issue.
412	Central bankers are talking about the possible need for more quantitative easing to ease the aggregate demand losses associated with the implementation of fiscal austerity programs. If calibrated correctly, QE can replace the net financial assets destroyed by the withdrawal of the fiscal injection.
1713	Central bank interest payments to the private banks on reserves reduces the private banks' incentive to advance credit to the private sector.
182	Central banks (for example, US Federal Reserve, Reserve Bank of Australia, and the Central Bank of Ireland) conduct monetary policy by setting the short-run interest rate rather than trying to control the money supply which is endogenous.
195	Central banks have a choice when attempting to stabilise aggregate demand and control inflation. They can set the price of money (via the interest rate) or control the volume of money. In recent years, they have been setting the price and allowing the volume to fluctuate.
964	Central banks in many nations moved from paying no return to commercial banks on overnight bank reserve balances to paying a positive interest return as the global financial crisis ensued. Previously, central banks had to conduct open market operations (sales and purchases of bonds) to provide (or deprive) the commercial banks of interest-bearing assets as a means of managing overnight liquidity (add or drain reserves) to ensure its policy rate was sustained. Ignoring any reserve requirements, the need to conduct these open market operations became redundant once they paid a positive return on overnight reserves.
691	Central banks manipulate bank reserves to control its policy interest rate.
948	Central banks manipulate bank reserves to control the policy target interest rate.
1567	Central banks provide reserves to the commercial banking system at some penalty rate. However, by standing ready to act as the lender of last resort to the commercial banks, the central bank's capacity to control bank lending and target a given monetary policy rate is compromised.
569	Central banks provide reserves to the commercial banking system at some penalty rate. However, this compromises their capacity to control bank lending and target a given monetary policy rate.
951	Central banks provide reserves to the commercial banking system at some penalty rate. However, this compromises their capacity to control bank lending and target a given monetary policy rate.
1646	Central banks provide reserves to the commercial banking system usually at some penalty rate. However, this compromises their capacity to target a given monetary policy rate.
2281	Central banks provide reserves to the commercial banking system usually at some penalty rate. However, this compromises their capacity to target a given monetary policy rate.
806	Central banks provide reserves to the commercial banking system usually at some penalty rate. However, this compromises their capacity to target a given monetary policy rate.
1120	Choose the correct response (all balances expressed as a per cent of GDP):\n(a) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.\n(b) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.\n(c) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus that is larger, while the private domestic sector is spending less than they are earning.\n(d) None of the above are possible as they all defy the sectoral balances accounting identity.
637	Choose the correct response (all balances expressed as a per cent of GDP):\n<br />\n(a) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.\n<br />\n(b) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.\n<br />\n(c) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus that is larger, while the private domestic sector is spending less than they are earning.\n<br />\n(d) None of the above are possible as they all defy the sectoral balances accounting identity.
1912	Choose the correct response (all balances expressed as a per cent of GDP):\n\n(a) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.\n\n(b) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.\n\n(c) A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus that is larger, while the private domestic sector is spending less than they are earning.\n\n(d) None of the above are possible as they all defy the sectoral balances accounting identity.
2313	Commercial banks are required to hold reserve accounts with the central bank for which reason
60	Commercial banks should applaud the government going into deficit because
1281	Conservatives have criticised several governments (such as in France and Italy) for not pursuing fiscal austerity programs with sufficient commitment. The fact that these government fiscal deficits continue to increase is evidence of this lack of commitment.
2446	Consider a government that increases spending by $100 billion in the each of the next three years. Economists estimate the spending multiplier (which is the multiple by which income increases for a given injection of spending) to be 1.5 and the impact is immediate and exhausted in each year. They also estimate that the import propensity is 0.2 (meaning that imports rise by 20 cents for every dollar generated in the economy). They also estimate the tax multiplier (impact of tax changes on income) to be equal to 1 and the current tax rate is equal to 30 per cent. So for every extra dollar produced, tax revenue rises by 30 cents. Which of the following statements is correct? The cumulative impact of this fiscal expansion on nominal GDP is
768	Consider a government that increases spending by $100 billion in the each of the next three years. Economists estimate the spending multiplier (which is the multiple by which income increases for a given injection of spending) to be 1.5 and the impact is immediate and exhausted in each year. They also estimate that the import propensity is 0.2 (meaning that imports rise by 20 cents for every dollar generated in the economy). They also estimate the tax multiplier (impact of tax changes on income) to be equal to 1 and the current tax rate is equal to 30 per cent. So for every extra dollar produced, tax revenue rises by 30 cents. Which of the following statements is correct? The cumulative impact of this fiscal expansion on nominal GDP is
1236	Considering only the initial impact on national income (ignoring multiplier effects), fiscal austerity will have a greater negative effect on real GDP if it manifests as a spending cut of $x than if the government chose to raise a value added tax to generate $x revenue at the current level of national income.
2350	Considering only the initial impact on national income (ignoring multiplier effects), fiscal austerity will have a greater negative effect on real GDP if it manifests as a spending cut of $x than if the government chose to raise a value added tax to generate $x revenue at the current level of national income.
2493	Considering only the initial impact on national income (ignoring multiplier effects), fiscal austerity will have a greater negative effect on real GDP if it manifests as a spending cut of $x than if the government chose to raise a value added tax to generate $x revenue at the current level of national income.
902	Considering only the initial impact on national income (ignoring multiplier effects), fiscal austerity will have a greater negative effect on real GDP if it manifests as a spending cut of $x than if the government chose to raise a value added tax to generate $x revenue at the current level of national income.
2043	Consider the following table which describes four different economies in terms of the behavioural parameters relating to the leakages to aggregate demand. Assume that in all four economies, there is idle capacity, the central bank holds all interest rates constant, inflation is constant and there are no changes in international competitiveness.\n\n<div style=\clear:both\></div>\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ rel=\lightbox[12042]\><img src=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ alt=\\ title=\Spending_multiplier_models\ class=\alignnone size-full wp-image-12048\ scale=\0\ width=\690\ height=\120\></a>\n<div style=\clear:both\></div>\n\nWhich economy would deliver the largest national income bonus for a given discretionary expansion in government spending.
1596	Consider the following table which describes four different economies in terms of the behavioural parameters relating to the leakages to aggregate demand. Assume that in all four economies, there is idle capacity, the central bank holds all interest rates constant, inflation is constant and there is no changes in international competitiveness.\n\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ rel=\lightbox[12042]\><img src=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ alt=\\ title=\Spending_multiplier_models\ width=\729\ height=\127\ class=\alignnone size-full wp-image-12048\ /></a>\n<div style=\clear:both\></div>\n\nWhich economy would deliver the largest national income bonus for a given discretionary expansion in government spending.
1554	Consider the following table which describes four different economies in terms of the behavioural parameters relating to the leakages to aggregate demand.\n\nAssume that in all four economies, there is idle capacity, the central bank holds all interest rates constant, inflation is constant and there is no changes in international competitiveness.\n\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ rel=\lightbox[12042]\><img src=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ alt=\\ title=\Spending_multiplier_models\ class=\alignnone size-full wp-image-12048\ width=\729\ height=\127\></a>\n<div style=\clear:both\></div>\n\nWhich economy would deliver the largest national income bonus for a given discretionary expansion in government spending (ignore the possibility of longer term wealth effects)?
2369	Consider the following table which describes four different economies in terms of the behavioural parameters relating to the leakages to aggregate demand.\n\nAssume that in all four economies, there is idle capacity, the central bank holds all interest rates constant, inflation is constant and there is no changes in international competitiveness.\n\n<div style=\clear:both\></div>\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\><img src=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ alt=\\ title=\Spending_multiplier_models\ width=\729\ height=\127\ class=\alignnone size-full wp-image-12048\ /></a>\n<div style=\clear:both\></div>\n\nWhich economy would deliver the largest national income bonus for a given discretionary expansion in government spending.
420	Consider the following table which describes four different economies in terms of the behavioural parameters relating to the leakages to aggregate demand.\n\nAssume that in all four economies, there is idle capacity, the central bank holds all interest rates constant, inflation is constant and there is no changes in international competitiveness.\n\n<div style=\clear:both\></div>\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\><img src=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ alt=\\ title=\Spending_multiplier_models\ width=\729\ height=\127\ class=\alignnone size-full wp-image-12048\ /></a>\n<div style=\clear:both\></div>\n\nWhich economy would deliver the largest national income bonus for a given discretionary expansion in government spending.
2509	Consider the following table which describes four different economies in terms of the behavioural parameters relating to the leakages to aggregate demand.\n\nAssume that in all four economies, there is idle capacity, the central bank holds all interest rates constant, inflation is constant and there is no changes in international competitiveness.\n\n<div style=\clear:both\></div>\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ rel=\lightbox[48140]\><img src=\https://billmitchell.org/blog/wp-content/uploads/2010/10/Spending_multiplier_models.jpg\ alt=\\ title=\Spending_multiplier_models\ class=\alignnone size-full wp-image-12048\ width=\690\ height=\120\></a>\n<div style=\clear:both\></div>\n\nWhich economy would deliver the largest national income bonus for a given discretionary expansion in government spending.
77	Consider this logic: (a) Atoms are not visible to the naked eye; (b) Humans are made up of atoms; (c) Therefore, humans are not visible to the naked eye. This logical flaw is demonstrated in macroeconomics by
1548	Consumption adds to aggregate demand and imports drain aggregate demand. The marginal propensity to consume (MPC) is conceptually the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1 then the impact on aggregate demand for every new dollar of national income generated will be neutral.
1899	Consumption adds to aggregate demand and imports drain aggregate demand. The marginal propensity to consume (MPC) is conceptually the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1, then the impact on aggregate demand for every new dollar of national income generated will be neutral.
2034	Consumption adds to aggregate spending and imports represent spending lost to the domestic economy. The marginal propensity to consume (MPC) is conceptually the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1 then the impact on aggregate demand for every new dollar of national income generated will be neutral.
1414	Continually expanding the money supply will eventually lead to inflation.
1216	Continually expanding the money supply will inevitably be inflationary.
1650	Continually expanding the money supply will inevitably be inflationary.
1010	Continuous budget deficits are more likely to present an inflation risk than one-off deficits designed to meet a short-term private spending decline.
700	Continuous budget deficits are more likely to present an inflation risk than one-off deficits designed to meet a short-term private spending decline.
677	Continuous budget deficits increase the stock of public spending which might increase the inflation risk if spending exceeds the real capacity of the economy to increase output.
1757	Continuous fiscal deficits are a greater inflation risk than one-off deficits designed to meet a short-term private spending decline.
1375	Continuous fiscal deficits are more likely to present an inflation risk than one-off deficits designed to meet a short-term private spending decline.
1730	Continuous fiscal deficits are more likely to present an inflation risk than one-off deficits designed to meet a short-term private spending decline.
2080	Continuous fiscal deficits are more likely to present an inflation risk than one-off deficits designed to meet a short-term private spending decline.
2430	Continuous fiscal deficits are more likely to present an inflation risk than one-off deficits designed to meet a short-term private spending decline.
66	Countries that entered the current crisis with budget surpluses or smaller deficits will as a result
1823	Current private sector wealth is invariant to the decision by government to issues bonds to match its deficit spending as against not issuing any bonds.
2174	Domestic deflation (reducing domestic wages and prices relative to other nations), which Eurozone nations are prone to pursue because they have no exchange rate flexibility, may not increase export competitiveness.
603	Domestic deflation (reducing domestic wages and prices relative to other nations), which some Eurozone nations are pursuing because they effectively face a fixed exchange rate, may not increase export competitiveness.
1708	During a recession, a government has to use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment.
666	During a recession, a government should use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment.
1290	During a recession, a government should use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment rate.
772	During a recession, a government should use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment rate.
1237	During a recession, if the government uses expansionary fiscal policy to restore trend real GDP growth it will restore full employment.
903	During a recession, if the government uses expansionary fiscal policy to restore trend real GDP growth it will restore full employment.
2351	During a recession, the government can always restore full employment if it uses expansionary fiscal policy to restore trend real GDP growth.
2494	During a recession, the government can always restore full employment if it uses expansionary fiscal policy to restore trend real GDP growth.
1618	During the American Civil War, the Confederate states experienced rising inflation as a result of their war spending in 1861. The Confederate Government could have eased the inflationary impact of this spending by issuing more bonds than it did.
2415	During the American Civil War, the Confederate states experienced rising inflation as a result of their war spending in 1861. The Confederate Government could have eased the inflationary impact of this spending by issuing more bonds than it did.
750	During the American Civil War, the Confederate states experienced rising inflation as a result of their war spending in 1861. The Confederate Government could have eased the inflationary impact of this spending by issuing more bonds than it did.
2132	ECB boss Christine Lagarde told the world on Thursday (March 12, 2020) that \we are not here to close spreads, that's not function of ECB\.
1006	Economists distinguish between the structural and the cyclical components of the budget outcome as a way of determining whether the fiscal policy stance of the government is expansionary, neutral or contractionary. In that context, which of the following situations represents the more expansionary outcome
1780	Economists note that the automatic stabilisers built into fiscal policy, increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle would be eliminated if the government followed a rule that required a zero fiscal balance at all times ('balanced budget rule').
1632	Economists note that the automatic stabilisers embedded in government fiscal policy increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle would not be eliminated if the government followed a fiscal rule such that it had to be in balance at all times.
1868	Economists note that the automatic stabilisers in-built into government fiscal policy increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle would not be eliminated if the government followed a fiscal rule such that it had to balance its fiscal outcome at all times.
2407	Economists note that the automatic stabilisers increase fiscal deficits (or reduce fiscal surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle could be eliminated if the government followed a fiscal rule such that it had to balance its spending and taxation revenue at all times.
2535	Economists note that the automatic stabilisers increase fiscal deficits (or reduce fiscal surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle could be eliminated if the government followed a fiscal rule such that it had to balance its spending and taxation revenue at all times.
1148	Economists note that the automatic stabilisers in the government's budget increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the budget outcome to the business cycle could be eliminated if the government followed a fiscal rule such that it had to balance its budget at all times.
463	Economists note that the automatic stabilisers in the government's budget increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the budget outcome to the business cycle could be eliminated if the government followed a fiscal rule such that it had to balance its budget at all times.
988	Economists note that the automatic stabilisers in the government's budget increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the budget outcome to the business cycle would be eliminated if the government followed a balanced budget fiscal rule.
882	Economists note that the automatic stabilisers in the government's budget increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the budget outcome to the business cycle would not be eliminated if the government followed a fiscal rule such that it had to balance its budget at all times.
1122	Economists use rules of thumb to make estimates of the future direction of key aggregates based upon assumptions about the movement in related aggregates. Say, we form the view that over the next year: (a) the average working week will be constant in hours; (b) real GDP growth rate will be 3 per cent; (c) output per unit of labour input (persons) grows at 1.5 per cent; and (d) the labour force maintains a growth rate of 1.5 per cent per annum. Using an appropriate rule of thumb we would project that the
1914	Economists use rules of thumb to make estimates of the future direction of key aggregates based upon assumptions about the movement in related aggregates. Say, we form the view that over the next year: (a) the average working week will be constant in hours; (b) real GDP growth rate will be 3 per cent; (c) output per unit of labour input (persons) grows at 1.5 per cent; and (d) the labour force maintains a growth rate of 1.5 per cent per annum. We would project that the
1361	Economists use two multipliers to estimate the impact on GDP of an expansion in government spending associated with rising tax rates. The spending multiplier indicates the extent to which GDP rises as a result of the extra aggregate demand arising from the increased government spending. The tax multiplier indicates the impact of rising tax rates on GDP as labour supply is reduced because of the disincentives associated with taxation. The net effect on GDP is the sum of these two impacts.
684	Economists use two multipliers to estimate the impact on GDP of an expansion in government spending associated with rising tax rates. The spending multiplier indicates the extent to which GDP rises as a result of the extra aggregate demand arising from the increased government spending. The tax multiplier indicates the impact of rising tax rates on GDP as labour supply is reduced because of the disincentives associated with taxation. The net effect on GDP is the sum of these two impacts.
795	Economists use two multipliers to estimate the impact on GDP of an expansion in government spending associated with rising tax rates. The spending multiplier indicates the extent to which GDP rises as a result of the extra aggregate demand arising from the increased government spending. The tax multiplier indicates the impact of rising tax rates on GDP as labour supply is reduced because of the disincentives associated with taxation. The net effect on GDP is the sum of these two impacts.
939	Economists use two multipliers to estimate the impact on GDP of an expansion in government spending associated with rising tax rates. The spending multiplier indicates the extent to which GDP rises as a result of the extra aggregate demand arising from the increased government spending. The tax multiplier indicates the impact of rising tax rates on GDP as labour supply is reduced because of the disincentives associated with taxation. The net effect on GDP is the sum of these two impacts.
1902	Economists use two multipliers to estimate the impact on GDP of an expansion in government spending associated with rising tax rates. The spending multiplier indicates the extent to which GDP rises as a result of the extra aggregate spending arising from the increased government spending. The tax multiplier indicates the impact of rising tax rates on GDP as labour supply is reduced because of the disincentives associated with taxation. The net effect on GDP is the sum of these two impacts. Assume that the government increases spending by $100 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current tax rate is equal to 30 per cent (so tax revenue rises by 30 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
1400	EMU member nations face solvency risk because they do not issue their own currency. This source of risk would be eliminated if these nations exited the Eurozone and issued their own floating currency.
688	EMU member nations face solvency risk because they do not issue their own currency. This source of risk would be eliminated if these nations exited the Eurozone and re-established their currency sovereignty - that is, issued their own floating currency.
2277	EMU member nations face solvency risk because they do not issue their own currency. This source of risk would not be eliminated if these nations exited the Eurozone and re-established their currency sovereignty - that is, issued their own floating currency.
796	EMU member nations face solvency risk because they do not issue their own currency. This source of risk would not be eliminated if these nations exited the Eurozone and re-established their currency sovereignty - that is, issued their own floating currency.
938	EMU member nations would eliminate their exposure to solvency risk if they exited the Eurozone and re-established their currency sovereignty - that is, issued their own floating currency.
733	Engaging unemployed workers in a government public works program to dig a large hole and fill it in again on a daily basis will provide no enduring benefit to national income.
1807	Estimates of cyclical fiscal balances by the IMF and other bodies are typically biased upward.
1168	Estimates of structural fiscal deficits published the multilateral agencies such as the IMF and the OECD  are to be treated with suspicion because they are based on excessively optimistic estimates of potential GDP.
2265	Estimates of structural fiscal deficits published the multilateral agencies such as the IMF and the OECD are to be treated with suspicion because they are based on excessively optimistic estimates of potential GDP.
2558	Estimates of structural fiscal deficits published the multilateral agencies such as the IMF and the OECD are to be treated with suspicion because they are based on excessively optimistic estimates of potential GDP.
223	Estimates of the sacrifice ratio that define a disinflation episode induced by tighter monetary policy as some finite period after which real output growth returns to its prior trend will always overstate the true cost of the policy because they ignore the persistence and hysteresis effects.
2123	Estimates of the structural fiscal balances are typically based on overly pessimistic estimates of potential GDP and thus should be disregarded.
304	Estonia and Latvia both run currency boards which requires that the nation have sufficient foreign reserves to match the outstanding central bank liabilities (reserves and cash outstanding). This system ensures 100 per cent convertibility but is highly deflationary unless the country runs external surpluses.
1357	European Commission estimates of structural budget deficits in the Eurozone under the Excessive Deficit Mechanism lead to the conclusion that a government's discretionary fiscal position is less expansionary than it actually is.
534	Eurozone nations can only alter their international competitiveness by reducing domestic wages and prices because they no longer have a floating currency.
751	Eurozone nations can only alter their international competitiveness by reducing domestic wages and prices because they no longer have a floating currency.
238	Eurozone nations with strong export positions such as Germany are more like a sovereign nation such as the UK or the US than they they are like Greece when it comes to dealing with a bank run within their own borders.
1322	Even a sovereign, currency-issuing government has to receive tax dollars from the non-government at times in order to to spend effectively.
64	Even if the government issues debt voluntarily in association with its deficits, the public debt is still
549	Even Modern Monetary Theory accepts that continually expanding the money supply will inevitably be inflationary.
1289	Even Modern Monetary Theory (MMT) accepts the proposition that continually expanding the money supply will inevitably be inflationary.
1656	Even though a government that issues its own fiat currency is not revenue constrained, it is still correct to say that recipients of income support provided by such a national government live off the hard work of those who pay income taxes.
96	Even though a national government is not revenue constrained, their surpluses can add to national saving if they arise from the private sector spending less than total GDP (income) produced.
18	Even though a sovereign government doesn't have to \finance\ its spending, if it issues debt to the private sector
1729	Even though the money multiplier found in macroeconomics textbooks is a flawed description of the way the monetary system operates, having some positive minimum reserve requirements does constrain credit creation activities of the private banks more than if you have no requirements other than the rule that balances have to be non-zero.
2348	Even though the money multiplier found in macroeconomics textbooks is a flawed description of the way the monetary system operates, having some positive minimum reserve requirements does constrain credit creation activities of the private banks more than if you have no requirements other than the rule that balances have to be non-zero.
2491	Even though the money multiplier found in macroeconomics textbooks is a flawed description of the way the monetary system operates, having some positive minimum reserve requirements does constrain credit creation activities of the private banks more than if you have no requirements other than the rule that balances have to be non-zero.
262	Even though the money multiplier found in macroeconomics textbooks is a flawed description of the way the monetary system operates, having some positive minimum reserve requirements does constrain credit creation activities of the private banks more than if you have no requirements other than the rule that balances have to be non-zero.
2024	Even though the money multiplier found in macroeconomics textbooks is a flawed description of the way the monetary system operates, having some positive minimum reserve requirements does constrain credit creation activities of the private banks more than if you have no requirements other than the rule that balances have to be positive.
348	Even though the money multiplier found in macroeconomics textbooks is a flawed description of the way the monetary system operates, having some positive minimum reserve requirements does constrain credit creation activities of the private banks more than if you have no requirements other than the rule that balances have to be positive.
1773	Excessive real wage demands by workers can cause such mass unemployment.
505	Excessive real wages growth can cause unemployment.
2560	Excessive real wages growth can trigger mass unemployment.
5	Federal government budget deficits
2048	Federal government debt (where there is currency sovereignty) is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debt but also has to repay them at the due date.
2347	Federal government debt (where there is currency sovereignty) is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debt but also has to repay them at the due date.
259	Federal government debt (where there is currency sovereignty) is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debt but also has to repay them at the due date.
1728	Federal government debt (where there is currency sovereignty) is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debts but also has to repay them at the due date.
1413	Financial market commentators watch movements in government bond yields as a guide to the state of confidence in the capacity of the respective governments to honour their liabilities. In this context, the commentators are correct when they conclude that rising yields on a particular 10-year bond yields are a sign that bond markets believe the assets to be riskier and are demanding increased risk premiums for them.
912	Financial market commentators watch movements in UK and US bond yields as a guide to the state of confidence in the capacity of the respective governments to honour their liabilities. In this context, the commentators are correct when they conclude that rising yields on 10-year bond yields are a sign that bond markets are demanding increased risk premiums for these assets.
1777	Fiscal austerity aims to reduce the stock of net government spending by reducing spending and/or increasing taxes.
933	Fiscal austerity aims to reduce the stock of net government spending by reducing spending and/or increasing taxes.
641	Fiscal austerity (manifesting as a budget surplus) will not to damage economic growth if the external balance is in surplus.
2191	Fiscal austerity (manifesting as a fiscal surplus) will not damage economic growth if the external balance is in surplus and adding net spending to the economy.
568	Fiscal austerity programs (which try to create primary budget surpluses) are likely to thwart the chances of a government reducing its public debt as a proportion of GDP because they are likely to reduce real GDP growth which, then drives the budget deficit up via the automatic stabilisers.
266	Fiscal rules such as are embodied in the Stability and Growth Pact of the EMU will continually create conditions of slower growth because they deprive the government of fiscal flexibility to support aggregate demand when necessary.
353	Fiscal rules such as are embodied in the Stability and Growth Pact of the EMU will continually create conditions of slower growth because they deprive the government of fiscal flexibility to support aggregate demand when necessary.
419	Fiscal rules such as are embodied in the Stability and Growth Pact of the EMU will continually create conditions of slower growth because they deprive the government of fiscal flexibility to support aggregate demand when necessary.
497	Fiscal rules such as are embodied in the Stability and Growth Pact of the EMU will continually create conditions of slower growth because they deprive the government of fiscal flexibility to support aggregate demand when necessary.
457	Fiscal rules ultimately fail to deliver the announced budget targets because the government does not control the budget outcome.
2063	For a country facing strong terms and trade and an appreciating currency, a cut in wages and the rate of inflation will restore  international competitiveness.
366	For a nation running a current account deficit, income adjustments will ensure government budget is in deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.
1979	For a nation running a current account deficit, income adjustments will ensure government fiscal position is in deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.
2022	For a nation running a current account deficit, income adjustments will ensure government fiscal position is in deficit if the domestic private sector successfully increases its overall saving as a percentage of GDP.
690	For a nation running a current account deficit, national income adjustments will ensure government budget is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.
797	For a nation running a current account deficit, national income adjustments will ensure government budget is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.
1541	For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.
1764	For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit if the private domestic sector seeks to increase its saving overall as a percentage of GDP.
1339	For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.
2075	For a nation running a current account deficit, national income adjustments will ensure government's fiscal position is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.
2539	For a nation running a current account deficit, national income adjustments will ensure government's fiscal position is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.
2275	For a nation running a current account deficit, national income adjustments will ensure the government fiscal position is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.
947	For a nation running a current account deficit, the government budget will always be in deficit no matter what the government's intentions are if the private domestic sector saves overall.
2359	For a nation running an external deficit, income adjustments will ensure government will record a deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.
2338	For a nation running an external deficit, income adjustments will ensure that the government fiscal balance is in deficit if the domestic private sector is save overall as a percentage of GDP.
2478	For a nation running an external deficit, income adjustments will ensure that the government fiscal balance is in deficit if the domestic private sector is saving overall as a percentage of GDP.
1019	For a nation running a small current account deficit (close to balance), the government budget will always be in deficit if the domestic private sector is spending less than it earns.
899	For a nation running a small current account deficit (close to balance), the government budget will always be in deficit if the domestic private sector is spending less than it earns.
1316	For a nation running a small current account deficit (close to balance), the government fiscal balance will always be in deficit if the domestic private sector is spending less than it earns.
2436	For a nation running a small current account deficit (close to balance), the government fiscal position will always be in deficit if the domestic private sector is spending less overall than it earns.
764	For a nation running a small current account deficit, the government budget will always be in deficit if the domestic private sector is spending less than it earns.
435	For a nation running a small current account deficit, the government budget will always be in deficit if the domestic private sector overall successfully saves.
1228	For a nation running a small current account deficit, the government fiscal balance will always be in deficit if the domestic private sector is spending less than it earns.
2067	For a nation running a small external deficit, the government fiscal position will always be in deficit if the domestic private sector successfully spends less than its income.
2443	For a nation running a small external deficit, the government will always be in deficit if the domestic private sector is saving overall.
1252	For a nation running a very small current account deficit (close to balance), the government fiscal balance will always be in deficit if the domestic private sector is spending less than it earns.
2124	For a nation with a strong terms of trade (and external surplus), it is wise for the government to run fiscal surpluses and accumulate them in a sovereign fund to create more future space for non-inflationary spending.
371	For nations enjoying strong terms of trade (and external surplus), it is sensible for the government to run budget surpluses and accumulate them in a sovereign fund to create more space for non-inflationary spending in the future.
2026	For nations enjoying strong terms of trade (and external surplus), it is sensible for the government to run fiscal surpluses and accumulate them in a sovereign fund to create more space for non-inflationary spending in the future.
286	For nations facing strong terms of trade (such as Australia), if the net exports boom is strong enough to push the budget into surplus and the economy to full employment then it is sensible for the government to accumulate the surpluses in a sovereign fund to create more space for non-inflationary spending in the future.
1937	For nations facing strong terms of trade (such as Australia), if the net exports boom is strong enough to push the fiscal balance into surplus and the economy to full employment then it is sensible for the government to accumulate the surpluses in a sovereign fund to create more space for non-inflationary spending in the future.
1808	For nations with an external surplus (such as Norway), it is sensible for the government to run fiscal surpluses and accumulate them in a sovereign fund to create more space for non-inflationary spending in the future.
1885	For the US private domestic sector to reduce its overall overall debt levels, the government must run a fiscal deficit.
1458	For the US private sector to reduce its overall overall debt levels, the government must run a deficit.
619	For the US private sector to reduce its overall overall debt levels, the government must run a deficit.
476	For the wage share in GDP to remain constant, wages have to keep pace with the growth in labour productivity.
2114	For workers to get a rising share of national income their nominal wages have to grow faster than inflation.
506	For workers to get a rising share of national income their nominal wages have to grow faster than inflation.
2038	For workers to maintain a constant share of a growing national income, the growth in wages (the money you get paid) must keep pace with inflation, if the latter, is accelerating at the same rate as labour productivity.
1121	For workers to regain a larger share of national income, nominal wages have to grow faster than inflation - that is, the real wage has to rise.
1913	For workers to regain a larger share of national income, nominal wages have to grow faster than inflation - that is, the real wage has to rise.
2395	For workers to regain a larger share of national income, nominal wages have to grow faster than inflation - that is, the real wage has to rise.
2523	For workers to regain a larger share of national income, nominal wages have to grow faster than inflation - that is, the real wage has to rise.
490	From a monetary perspective, it would be impossible for a central bank to directly purchase Treasury debt to facilitate a national government's budget deficit while still targeting a non-zero policy rate.
2109	From a monetary perspective, it would be impossible for a central bank to directly purchase Treasury debt to facilitate a national government's fiscal deficit while still targeting a non-zero policy rate.
28	From the perspective of aggregate demand, creating a minimum wage private sector job
2266	From the perspective of Modern Monetary Theory (MMT) he is correct, excessive real wages growth can trigger mass unemployment.
2145	From the perspective of Modern Monetary Theory (MMT), mass unemployment can arise from workers demanding excessive real wages.
305	From the perspective of Modern Monetary Theory (MMT), mass unemployment can arise from workers demanding too high a nominal wage in relation to the inflation rate.
563	From the US National Accounts, you find that in 2006, the share of Personal consumption expenditure in real GDP was 69.9 per cent and by 2008 it had fallen to 69.8 per cent. Similarly, the share of Gross private domestic investment on real GDP was 17.2 per cent in 2006 and by 2008 had fallen to 14.9 per cent (and further to 11.8 per cent in 2009). The net export deficit over the same period (2006 to 2008) fell from -5.7 per cent of real GDP to -4.9 per cent in 2008. Finally, the share of Government consumption expenditures and gross investment in real GDP rose from 18.8 per cent in 2006 to 18.9 per cent in 2008 (and 19.7 per cent in 2009). These relative changes confirm that real GDP was lower in 2008 compared to 2006 because the increase in Government spending and the falling negative contribution of net exports were not sufficient to offset the declining contribution from consumption and investment.
1349	From the US National Accounts, you find that in 2006, the share of Personal consumption expenditure in real GDP was 69.9 per cent and by 2008 it had fallen to 69.8 per cent. Similarly, the share of Gross private domestic investment on real GDP was 17.2 per cent in 2006 and by 2008 had fallen to 14.9 per cent (and further to 11.8 per cent in 2009). The net export deficit over the same period (2006 to 2008) fell from -5.7 per cent of real GDP to -4.9 per cent in 2008. Finally, the share of Government consumption expenditures and gross investment in real GDP rose from 18.8 per cent in 2006 to 18.9 per cent in 2008 (and 19.7 per cent in 2009). These relative changes tell you that real GDP was lower in 2008 compared to 2006 because the increase in Government spending and the falling negative contribution of net exports were not sufficient to offset the declining contribution from consumption and investment.
1927	From the US National Accounts, you find that in 2006, the share of Personal consumption expenditure in real GDP was 69.9 per cent and by 2008 it had fallen to 69.8 per cent. Similarly, the share of Gross private domestic investment on real GDP was 17.2 per cent in 2006 and by 2008 had fallen to 14.9 per cent (and further to 11.8 per cent in 2009). The net export deficit over the same period (2006 to 2008) fell from -5.7 per cent of real GDP to -4.9 per cent in 2008. Finally, the share of Government consumption expenditures and gross investment in real GDP rose from 18.8 per cent in 2006 to 18.9 per cent in 2008 (and 19.7 per cent in 2009). These relative changes tell you that real GDP was lower in 2008 compared to 2006 because the increase in Government spending and the falling negative contribution of net exports were not sufficient to offset the declining contribution from consumption and investment.
2056	From the US National Accounts, you find that in 2006, the share of Personal consumption expenditure in real GDP was 69.9 per cent and by 2008 it had fallen to 69.8 per cent. Similarly, the share of Gross private domestic investment on real GDP was 17.2 per cent in 2006 and by 2008 had fallen to 14.9 per cent (and further to 11.8 per cent in 2009). The net export deficit over the same period (2006 to 2008) fell from -5.7 per cent of real GDP to -4.9 per cent in 2008. Finally, the share of Government consumption expenditures and gross investment in real GDP rose from 18.8 per cent in 2006 to 18.9 per cent in 2008 (and 19.7 per cent in 2009). These relative changes tell you that real GDP was lower in 2008 compared to 2006 because the increase in Government spending and the falling negative contribution of net exports were not sufficient to offset the declining contribution from consumption and investment.
253	From the US National Accounts, you find that in 2006, the share of Personal consumption expenditure in real GDP was 69.9 per cent and by 2008 it had fallen to 69.8 per cent. Similarly, the share of Gross private domestic investment on real GDP was 17.2 per cent in 2006 and by 2008 had fallen to 14.9 per cent (and further to 11.8 per cent in 2009). The net export deficit over the same period (2006 to 2008) fell from -5.7 per cent of real GDP to -4.9 per cent in 2008. Finally, the share of Government consumption expenditures and gross investment in real GDP rose from 18.8 per cent in 2006 to 18.9 per cent in 2008 (and 19.7 per cent in 2009). These relative changes tell you that real GDP was lower in 2008 compared to 2006 because the increase in Government spending and the falling negative contribution of net exports were not sufficient to offset the declining contribution from consumption and investment.
430	From the US National Accounts, you find that in 2006, the share of Personal consumption expenditure in real GDP was 69.9 per cent and by 2008 it had fallen to 69.8 per cent. Similarly, the share of Gross private domestic investment on real GDP was 17.2 per cent in 2006 and by 2008 had fallen to 14.9 per cent (and further to 11.8 per cent in 2009). The net export deficit over the same period (2006 to 2008) fell from -5.7 per cent of real GDP to -4.9 per cent in 2008. Finally, the share of Government consumption expenditures and gross investment in real GDP rose from 18.8 per cent in 2006 to 18.9 per cent in 2008 (and 19.7 per cent in 2009). These relative changes tell you that real GDP was lower in 2008 compared to 2006 because the increase in Government spending and the falling negative contribution of net exports were not sufficient to offset the declining contribution from consumption and investment.
1126	f the external sector was running a surplus equivalent to 4 per cent of GDP, and the sum of all the private sector spending plans indicated it was desiring to run a surplus overall equivalent to 6 per cent, then the government could safely plan on achieving a budget surplus of 2 per cent of GDP.
2289	Given a fiat currency issuing nation is not revenue constrained, it is incorrect to say that recipients of income support provided by such a national government are living off the hard work of those who pay income taxes.
817	Given a fiat currency issuing nation is not revenue constrained, it is incorrect to say that recipients of income support provided by such a national government are living off the hard work of those who pay income taxes.
1549	Given government bonds represent a source of wealth for the non-government purchaser, a decision to allow the central bank to directly purchase government bonds to exactly match ($-for-$) the increase in net public spending will, initially, result in lower net worth for the non-government sector relative to the situation where the government sells the bonds to the private markets.
1462	Given that government bonds constitute a component of non-government sector wealth, that sector's net worth rises if the government issues bonds to match its deficit spending.
2133	Given that most governments are sovereign in their own currencies, there is no limit on the expenditure that these governments can introduce to deal with the coronavirus emergency.
155	Given that the US federal government is legally required to issue debt $-for-$ to match its net spending, if foreign countries especially China stopped buying the debt the government would have to cut back its spending proportionally.
956	Given the existence of a few nations that run large external surpluses, most nations run current account deficits. Under these conditions, the deficit nations operate within the constraint that national income movements will ensure that the two remaining sectors (government and private domestic) end up spending more than they receive, irrespective of the GDP growth rate.
1381	Government bonds constitute a form of wealth held by the non-government sector and thus the overall non-government sector wealth rises when the government issues bonds to match its deficit spending.
1067	Government bonds constitute a form of wealth held by the non-government sector. But it remains that overall non-government sector wealth does not rise if the government issues bonds to match its deficit spending as against the central bank just buying the bonds and crediting bank accounts.
2323	Government bonds constitute non-government financial wealth. Accordingly, non-government net worth immediately rises if the government issues new bonds to match its deficit spending.
2460	Government bonds constitute non-government financial wealth. Thus, a fiscal deficit will add to non-government sector net worth only if it is accompanied by the issuance of new bonds.
2416	Government deficits can crowd out private spending.
1516	Government deficit spending which is accompanied by a bond sale to the non-government sector adds less to aggregate demand than would be the case if there was no bond sale accompanying the deficit.
1534	Government deficit spending which is accompanied by a bond sale to the private sector initially adds less to aggregate spending than would be the case if there was no bond sale.
1771	Government deficit spending would have a greater expansionary impact on aggregate demand if the central bank bought the public debt to match the deficit instead of a situation where the government matches it deficit by issuing debt to the private sector.
985	Government deficit spending would have a greater expansionary impact on aggregate demand if the central bank bought the public debt to match the deficit instead of a situation where the government matches it deficit by issuing debt to the private sector.
2255	Government deficit spending would have a greater immediate expansionary impact on aggregate spending if the central bank bought the public debt to match the deficit instead of a situation where the government matches it deficit by issuing debt to the private sector.
2552	Government deficit spending would have a greater immediate expansionary impact on aggregate spending if the central bank bought the public debt to match the deficit instead of a situation where the government matches it deficit by issuing debt to the private sector.
2530	Governments concerned with their public debt ratio should encourage growth because the debt ratio always falls once economic growth resumes.
1095	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
1134	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
1769	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
1917	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
2231	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
2253	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
2402	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
2550	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
982	Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
2228	Governments concerned with their public debt ratio should encourage growth because the ratio will fall once economic growth resumes.
1429	Government spending can crowd out private spending.
1106	Government spending can crowd out private spending, which means that an increase in the former will reduce the latter.
2340	Government spending which is accompanied by a bond sale to the non-government sector adds less to aggregate demand than would be the case if there was no bond sale.
2480	Government spending which is accompanied by a bond sale to the non-government sector adds less to aggregate demand than would be the case if there was no bond sale.
2269	Government spending which is accompanied by a bond sale to the non-government sector adds less to aggregate demand than would be the case if there was no bond sale because some spending capacity in the non-government sector is withdrawn.
2050	Government spending which is accompanied by a bond sale to the non-government sector adds less to aggregate spending than would be the case if there was no bond sale.
1172	Government spending which is accompanied by a bond sale to the private sector adds less to aggregate demand than would be the case if there was no bond sale.
243	Government spending which is accompanied by a bond sale to the private sector adds less to aggregate demand than would be the case if there was no bond sale.
341	Government spending which is accompanied by a bond sale to the private sector adds less to aggregate demand than would be the case if there was no bond sale.
1999	Government spending which is accompanied by a bond sale to the private sector adds less to aggregate spending on day 1 than would be the case if there was no bond sale.
1918	Government spending which is not accompanied by a bond sale to the non-government sector immediately adds more to total spending than would be the case if there was a bond sale.
525	Governments pursuing fiscal austerity desire to reduce their public debt ratios. While that desire is ill-founded the strategy will achieve that end but at the cost of higher unemployment.
618	Greece will only start to reduce its public debt ratio when the government can run primary budget surpluses.
269	Greece would have to undergo a period of austerity even if the Greek government left the EMU, restored its currency and renegotiated all Euro debts into the drachma (that is, defaulted). This is because investors would be reluctant to purchase Greek government debt and they would have to reduce their net spending accordingly.
1113	Greek or Spanish export competitiveness (within the Eurozone) will increase if they can successfully reduce domestic wages and prices relative to other nations irrespective of the impact of this policy on real GDP growth.
101	Growth in private investment requires a pool of saving to draw upon. This means that if government net spending is also drawing on those savings (even if the borrowing is voluntary) then less will be available for private capacity building. That is appropriate though when investors are pessimistic.
277	Has been withdrawn!
35	Higher government deficits may drive up interest rates if bond markets begin to get short of funds. This statement is false
1530	Higher levels of taxation are necessary to permit the government to spend more in real terms.
1980	Higher levels of taxation permit the government to increase its real spending.
1936	Higher levels of taxation permit the government to spend more.
2339	Higher levels of taxation permit the government to spend more.
284	Higher levels of taxation permit the government to spend more.
367	Higher levels of taxation permit the government to spend more.
2479	Higher levels of taxation revenue ultimately permit the government to spend more.
1587	Historically, government debt has been used by central banks to manage liquidity and sustain positive short-term policy interest rates targets. This function necessitates that currency-issuing governments continue to, at least, issue enough debt to allow these open market operations to continue.
6	Hours-based measures of labour underutilisation will always be higher than person-based measures
2387	If a central bank continues to use Quantitative Easing to accompany net public spending, it would still require debt issuance to support a non-zero policy interest rate.
2515	If a central bank continues to use Quantitative Easing to accompany net public spending, it would still require debt issuance to support a non-zero policy interest rate.
2085	If a central bank uses \overt monetary financing\ (OMF) to support the net public spending, it would still require debt issuance if they wanted to target a non-zero policy interest rate.
2246	If a central bank uses \overt monetary financing\ (OMF) to support the net public spending, it would still require debt issuance if they wanted to target a non-zero policy interest rate.
2546	If a central bank uses \overt monetary financing\ (OMF) to support the net public spending, it would still require debt issuance if they wanted to target a non-zero policy interest rate.
129	If a country runs a permanent external deficit (current account), and its government aims to balance its budget (on average) over the course of a business cycle (peak to peak in GDP), then it means that the government also wants the private domestic sector to run deficits (spend more than they are earning and increase their debt obligations) over the same business cycle.
2146	If a government balances its fiscal position over a given economic cycle (peak to peak), then the private domestic sector will be increasingly indebted if there is an average external deficit over the same cycle.
873	If a government doesn't raise tax revenue then it is unable to spend.
967	If a government is running an austerity program and learns that the estimated output gap was smaller than they originally thought, then other things equal, the governments discretionary fiscal austerity would have to be intensified to balance the structural budget.
1767	If a government is running an austerity program and learns that the estimated output gap was smaller than they originally thought, then other things equal, the governments discretionary fiscal austerity would have to be intensified to balance the structural fiscal balance.
1469	If a government wants to reduce the public debt ratio, then it has to eventually run primary fiscal surpluses (that is, spend less than they raise in taxes).
78	If a household saves a higher proportion of their income they will have higher future consumption possibilities. Therefore if all households save a higher proportion of their income then all households will have higher future consumption possibilities. This logic is
1409	If all bank loans had to be backed by reserves held at the bank (a 100 per cent reserve requirement) then the capacity of the banks to lend would be more constrained which would help maintain financial stability.
928	If all bank loans had to be backed by reserves held at the bank (a 100 per cent reserve requirement) then the capacity of the banks to lend would be more constrained which would help maintain financial stability.
1817	If all bank loans had to be backed by reserves held at the bank then this would act as a brake on the capacity of the banks to lend.
1577	If all bank loans had to be backed by reserves held at the bank then this would act as a brake on the capacity of the banks to lend and help maintain financial stability.
782	If all bank loans had to be backed by reserves held at the bank then this would act as a brake on the capacity of the banks to lend and help maintain financial stability.
1222	If all national governments simultaneously manage to run public surpluses (a neo-liberal nirvana) then it would still be possible for all their respective private domestic sectors to simultaneously save overall as long as no nation ran an external deficit.
1348	If all national governments simultaneously run public surpluses then it is not possible for all their private domestic sectors to save overall.
429	If all national governments simultaneously run public surpluses then it is not possible for all their private domestic sectors to save overall.
2236	If all the spending in the economy creates a stock of aggregate spending which exceeds the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
1500	If a national currency-issuing government stopped issuing public debt, then its deficit spending would be more expansionary than if it matched the deficits with new debt issues.
197	If a national government brings in a fiscal rule that the budget is required to be in balance at all times then discretionary fiscal policy and monetary policy together will always be pro-cyclical.
172	If a national government builds a road and then tears it up again only to rebuild it again later, there is no net gain in employment and national income the second time round.
327	If a national government builds a road and then tears it up again only to rebuild it again later, there is no net gain in employment and national income the second time round.
1395	If a national government constructs a road in Year 1 but then in Year 2 tears it up and relays it with the recycled road materials, the national income stimulus from the policy is only enjoyed in the first year.
1420	If a national government receives advice that the estimated output gap for their nation was less than previously thought, then other things equal, its discretionary fiscal austerity would have to be intensified to achieve a zero structural fiscal balance if it was currently in deficit.
1840	If a nation has an external deficit and household saving increases as a proportion of disposable income then the government cannot run a fiscal surplus without output falling.
1197	If a nation is earning less than it is spending with respect to its transactions with the rest of the world and household saving suddenly increases as a proportion of disposable income, then the government could still run its current surplus without a decline in output and income occurring.
2422	If a nation is enjoying an external deficit, then one other sector must be spending more than it is earning.
989	If a nation is enjoying an external deficit, then one other sector must be spending more than it is earning.
1531	If a nation is recording a current account deficit, and its private domestic sector tries to increase its saving overall as a percentage of GDP, then income adjustments will ensure the government fiscal balance is in deficit.
1077	If a nation is running a current account deficit accompanied by a government sector surplus of equal proportion to GDP, the private domestic sector must to be in deficit.
918	If a nation is running a current account deficit and the private domestic sector is saving overall, then national income adjustments will ensure the government budget is in surplus.
1482	If a nation records an external balance (net exports equal zero) and the government runs a balanced fiscal position then we know that private domestic sector spending will be equal to its overall income and household saving will be zero.
559	If a nation records an external balance (net exports equal zero) then the government can safely run a balanced public budget without undermining the capacity of the private domestic sector to save overall.
2200	If a nation runs continuous fiscal deficits, the risk is that the accumulation of spending will eventually add to inflationary pressures.
1688	If a nation's external sector is in balance (and thus making no contribution to real GDP growth) then the private domestic sector cannot save if the government runs a balanced fiscal outcome.
770	If a nation's external sector is in balance (and thus making no contribution to real GDP growth) then the private domestic sector cannot save overall if the government runs a balanced budget.
664	If a nation's external sector is in balance (and thus making no contribution to real GDP growth) then the private domestic sector will not be able to spend more than it earns (at the current income level) if the government runs a balanced budget.
1404	If a nation's external sector is in balance then the private domestic sector cannot save overall if the government runs a balanced fiscal outcome.
1874	If a nation that is running an on-going external deficit is to avoid a recession, then the government spending (relative to taxation) has to rise if the household saving ratio rises.
913	If a nation that is running an on-going external deficit is to avoid a recession, then the government spending (relative to taxation) has to rise if the household saving ratio rises.
1028	If a nation was running a current account deficit and a budget surplus equal to 2 per cent of GDP, we would always observe that the private domestic sector was spending more than it is earning.
1901	If an economy is projected to grow in real terms by around 2.1 per cent over the next 12 months. Real GDP per employed person is estimated to grow by 1.1 per cent over the same period and there is also the expectation that average weekly hours worked will remain more or less constant over the period. Which of the following labour force growth rates would provide the basis for an expectation that the unemployment rate will be lower at the end of period than at the beginning?
125	If an individual repays a bank loan in dollar bills instead of with a cheque, this transaction will not destroy the financial assets created when the loan was made because a bank will never destroy that cash. So not all transactions between non-government entities net to zero.
1591	If any nation adopts a 'balanced budget' rule (that government spending plus interest payments must equal revenue at all times) and they successfully achieve that goal then the private domestic sector in nations that run external deficits will always spend less than they earn.
504	If a sovereign national government runs a balanced budget (on average) over a business cycle, then the average private domestic deficit (surplus) will always be exactly equal to the average external deficit (surplus) over the same cycle.
2562	If a sovereign national government runs a balanced fiscal position over the economic cycle (peak to peak), it must accept, that after all the spending adjustments are exhausted, that the private domestic balance will only be in surplus if the external balance is in surplus.
1153	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be impossible for all their respective private domestic sectors to save overall.
2258	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be impossible for all their respective private domestic sectors to save overall unless every country balanced their external positions.
2095	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be impossible for all their respective private domestic sectors to spend less than they earn.
724	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be impossible for all their respective private domestic sectors to spend less than they earn.
851	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be impossible for all their respective private domestic sectors to spend less than they earn.
992	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be impossible for <strong>all</strong> their respective private domestic sectors to save overall.
1199	If austerity led to all national governments simultaneously running public surpluses (which is the aim) then it would be still possible for all their respective private domestic sectors to spend less than they earn depending on the trade outcome.
1315	If banks are required to maintain 100 per cent reserve requirements (must have cash reserves to back deposits at all times), then the central bank is able to control the money supply.
1165	If Brussels relaxed the budget restrictions on national governments that are applicable under the Stability and Growth Pact (3 per cent deficit to GDP ratios and 60 per cent public debt to GDP ratios) then the current solvency risk facing several EMU members would be resolved.
1588	If calibrated correctly, quantitative easing (QE) programs run by central banks can replace the net financial assets held by the non-government sector, which are destroyed by fiscal austerity programs.
1423	If central banks stopped paying a return to the private banks on the reserves they hold with the central bank then the private banks would have a greater incentive to advance credit to the private sector.
857	If central banks stopped paying a return to the private banks on the reserves they hold with the central bank then the private banks would have a greater incentive to advance credit to the private sector.
1948	If economy-wide average nominal wages fail to keep pace with the inflation rate then it means the owners of capital are enjoying an increasing share in GDP.
484	If economy-wide average nominal wages fail to keep pace with the inflation rate then it means the profit share in GDP is rising.
660	If economy-wide average nominal wages grow more slowly than the inflation rate then real income is being redistributed to profits.
103	If employment growth is 2 per cent per annum; labour force growth is 2 per cent per annum and labour productivity growth (in persons employed) is 1 per cent per annum, then you know GDP growth is insufficient to stop the unemployment rate from rising (assuming weekly hours worked is constant).
1346	If employment growth matches the pace of growth in the civilian population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
1508	If employment growth matches the pace of growth in the civilian population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
324	If employment growth matches the pace of growth in the civilian population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
400	If employment growth matches the pace of growth in the civilian population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
2078	If employment growth matches the pace of growth in the working age population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
2090	If employment growth matches the pace of growth in the working age population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
2542	If employment growth matches the pace of growth in the working age population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
458	If employment growth matches the pace of growth in the working age population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.
135	If German and Chinese consumers increased their spending it would stimulate the world economy and increase the living standards of countries that export goods to them.
363	If government net spending increases (rising budget deficit) then policy is becoming more expansionary and the only risk is that nominal aggregate spending growth might exceed the real capacity of the economy to respond by increasing real output and cause inflation.
1529	If government net spending increases (rising fiscal deficit) then the policy stance is becoming more expansionary and the only risk is that nominal aggregate spending growth might exceed the real capacity of the economy to respond by increasing real output and cause inflation.
1152	If governments allowed the automatic stabilisers built into the government balance to work counter-cyclically and avoided discretionary shifts in fiscal policy, the fiscal balance would return to its appropriate level after a cyclical disturbance.
2257	If governments allowed the automatic stabilisers built into the government balance to work counter-cyclically and avoided discretionary shifts in fiscal policy, the fiscal balance would return to its appropriate level after a cyclical disturbance.
2554	If governments allowed the automatic stabilisers built into the government balance to work counter-cyclically and avoided discretionary shifts in fiscal policy, the fiscal balance would return to its appropriate level after a cyclical disturbance.
1636	If governments sought funding from the central bank for their net spending (deficits) rather than private bond markets then the inflation risk of such spending would remain unchanged.
889	If governments sought funding from the central bank for their net spending (deficits) rather than private bond markets then the inflation risk of such spending would remain unchanged.
1648	If Greece could achieve positive net exports (the strategy of the Troika), then it could could push for a primary fiscal surplus knowing it will not compromise growth.
1133	If in attempting to estimate the cyclical component of a government budget outcome we underestimate the potential capacity of an economy, we will conclude that the government's discretionary fiscal position is less expansionary than it actually is.
2230	If in attempting to estimate the cyclical component of a government fiscal outcome we underestimate the potential capacity of an economy, we will conclude that the government's discretionary fiscal position is less expansionary than it actually is.
2401	If in attempting to estimate the cyclical component of a government fiscal outcome we underestimate the potential capacity of an economy, we will conclude that the government's discretionary fiscal position is less expansionary than it actually is.
2529	If in attempting to estimate the cyclical component of a government fiscal outcome we underestimate the potential capacity of an economy, we will conclude that the government's discretionary fiscal position is less expansionary than it actually is.
1257	If inflation is maintained at a rate equal to the interest rate, then the government deficit as a proportion of GDP could double (say from 2 to 4 per cent) without pushing up the public debt ratio.
570	If inflation is maintained at a rate equal to the interest rate, then the government deficit as a proportion of GDP could double (say from 2 to 4 per cent) without pushing up the public debt ratio.
1568	If inflation is stable and maintained at a rate equal to the interest rate, then the government deficit as a proportion of GDP could double (say from 2 to 4 per cent) without pushing up the public debt ratio.
1647	If inflation is stable and the central bank holds the nominal interest rate constant, then a currency-isuing government, which matches its net spending $-for-$ with debt issuance, could double its fiscal deficit without pushing up the public debt ratio.
952	If inflation rate remained equal to the nominal interest rate, then the government deficit could double (from say 2 to 4 per cent of GDP) without pushing up public debt as a proportion of GDP.
1942	If inflation rate remained equal to the nominal interest rate, then the government primary deficit could double (from say 2 to 4 per cent of GDP) without pushing up public debt as a proportion of GDP.
63	If investors started to worry about the size of the Australian Government deficit and demand for federal public debt fell
1302	If Italy, which currently faces insolvency risk on its outstanding public debt, was to leave the Eurozone, re-introduce the lira, and re-denominate all euro liabilities into the new currency, then they would eliminate that risk on all future liabilities.
1451	If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then real GDP growth must be greater than 3.5 per cent per annum or unemployment will rise.
708	If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then real GDP growth must be greater than 3.5 per cent per annum or unemployment will rise.
81	If more people flow out of employment into unemployment than flow into employment from unemployment in any month, then the unemployment rate will
2374	If national government public works expenditure funds the construction of a new road but then digs it up and rebuilds, the expenditure in the rebuild would not count towards national income.
402	If national government public works expenditure funds the construction of a road and then the government tears the road up again and rebuilds it, there is no net gain in employment and national income the second time round.
2155	If national government public works expenditure funds the construction of a road and then the government tears the road up again and rebuilds it, there is no net gain in national income the second time round.
1547	If national government public works expenditure leads to the construction of a road, which the government proceeds to tear up and rebuild next year, then there is no net gain for society the second time round.
477	If net exports are contributing to economic growth, then the national government has the room to run a budget surplus without impeding that growth.
2159	If net exports are contributing to economic growth, then the national government may have the room to run a fiscal surplus without impeding that growth.
2188	If net exports are running at 2 per cent of GDP, and the private domestic sector is saving overall an equivalent of 3 per cent of GDP, the government must be running a surplus equal to 1 per cent of GDP.
567	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must
1207	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running
2004	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running
1566	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running a deficit equal to 1 per cent of GDP.
1701	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running a surplus equal to 1 per cent of GDP.
1961	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running a surplus equal to 1 per cent of GDP.
636	If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running a surplus equal to 1 per cent of GDP.
308	If nominal wages keep pace with inflation which is accelerating at the same rate as labour productivity is growing then there is no shift in the wage share in GDP.
382	If nominal wages keep pace with inflation which is accelerating at the same rate as labour productivity is growing then there is no shift in the wage share in GDP.
1738	If participation rates are constant, percentage unemployment will not change as long as employment growth matches the pace of growth in the working age population (people above 15 years of age).
2197	If participation rates are constant, percentage unemployment will not change as long as employment growth matches the pace of growth in the working age population (people above 15 years of age).
651	If participation rates are constant, percentage unemployment will not change as long as employment growth matches the pace of growth in the working age population (people above 15 years of age).
2130	If policy makers use NAIRU estimates to compute the decomposition between structural and cyclical fiscal balances and these estimates are above the true full employment unemployment rate, then the estimated impact of the automatic stabilisers will always be biased downwards.
270	If policy makers use the NAIRU to compute the decomposition between structural and cyclical budget balances, then if the estimated NAIRU is above the true full employment unemployment rate, the estimated impact of the automatic stabilisers will always be biased downwards.
1735	If policy makers use the NAIRU to compute the decomposition between structural and cyclical fiscal balances, then if the estimated NAIRU is above the true full employment unemployment rate, the estimated impact of the automatic stabilisers will always be biased downwards.
1007	If private domestic investment is greater than private domestic saving and the current account is draining aggregate demand then the government budget has to be in deficit no matter what level of GDP is produced.
1139	If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
2084	If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
2245	If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
2386	If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
2514	If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
2545	If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
633	If private domestic investment is less than private domestic saving and the current account is draining aggregate demand then the government budget has to be in deficit no matter what level of GDP is produced.
870	If private domestic investment is less than private domestic saving and the current account is draining aggregate demand then the government budget has to be in deficit no matter what level of GDP is produced.
1433	If private domestic investment is less than private domestic saving and the current account is in deficit then the government fiscal balance will be in deficit no matter what growth rate GDP is generated.
2201	If private domestic investment is less than private domestic saving and the current account is in deficit, then the government fiscal balance will be in deficit no matter what level of GDP is produced.
2186	If private domestic investment is less than private domestic saving and the external account is draining aggregate demand then the government fiscal balance will always be in deficit no matter what level of GDP is produced.
1246	If private domestic investment is less than private domestic saving and the external sector is draining aggregate demand then the government fiscal balance has to be in deficit no matter what level of GDP is produced.
2354	If private domestic investment is less than private domestic saving, and, the external sector is draining aggregate demand, then the government fiscal balance has to be in deficit no matter what level of GDP is produced.
2497	If private domestic investment is less than private domestic saving, and, the external sector is draining aggregate demand, then the government fiscal balance has to be in deficit no matter what level of GDP is produced.
1575	If private domestic investment is less than private domestic saving, and the external sector is draining aggregate spending from the domestic economy, then the government fiscal balance has to be in deficit no matter what level of GDP is produced.
1717	If private domestic investment is less than private domestic saving and the external sector is draining aggregate spending from the economy then the government fiscal balance has to be in deficit no matter what level of GDP is produced.
1343	If private households and firms decide to lift their saving ratio the national government has to increase its net spending (deficit) to fill the spending gap or else economic activity will slow down.
493	If private households and firms decide to lift their saving ratio the national government has to increase its net spending (deficit) to fill the spending gap or else economic activity will slow down.
582	If private households and firms decide to lift their saving ratio the national government has to increase its net spending (deficit) to fill the spending gap or else economic activity will slow down.
1707	If private households increase their saving from disposable income and firms reduce their investment expenditure, then the government has to expand its fiscal deficit to avoid employment losses.
112	If private investors become saturated with Australian government debt issues as the deficits rise, their demand will drop and yields will rise for those maturities (say 10-year bonds). This spills over into increased borrowing costs for the private sector generally and reduces the desire to invest.
128	If public employment and private employment growth match the growth in the labour force, then unemployment cannot rise.
2272	If the annual inflation rate is greater than the growth in money wages, we can conclude that there has been a redistribution of national income towards profits because the real wage has fallen.
428	If the budget deficit rises then government policy is becoming more expansionary and this carries the risk that nominal aggregate spending growth might exceed the real capacity of the economy to respond by increasing real output.
692	If the central bank chooses to pay a return on overnight reserves held by the commercial banks equal to the current policy rate then the overall level of reserves held by the latter will be higher than otherwise (ignore any reserve requirements).
949	If the central bank chooses to pay a return on overnight reserves held by the commercial banks equal to the current policy rate then the overall level of reserves held by the latter will be higher than otherwise (ignore any reserve requirements).
68	If the central bank does not pay interest to the bank's on overnight reserves, then deficit spending by the treasury
37	If the central bank offered no return on overnight bank reserves then
1184	If the central bank offers a positive interest rate on overnight reserves held by the commercial banks equal to its target policy rate, then it no longer has to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements in place when answering).
1542	If the central bank pays a positive interest rate on excess bank reserves then it no longer has to conduct open market operations to ensure a non-zero target policy rate is sustained.
368	If the central bank pays a positive interest rate on overnight reserves then it no longer has to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
1765	If the central bank pays a positive interest rate on overnight reserves then it no longer would have to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
1474	If the central bank regulated that banks have to hold reserve equivalent to their outstanding loans this would restrict lending.
642	If the central bank regulated that banks have to hold reserve equivalent to their outstanding loans this would restrict lending.
1881	If the central bank required that banks have to hold reserves equivalent to their outstanding loans this would restrict lending.
107	If the central bank requires commercial banks to maintain a positive fraction of its deposits as reserves (say 5 per cent) then this modifies the idea that loans create deposits because then the banks have to have reserves before they can lend.
36	If the central bank set the interest rate to zero then
1848	If the current account balance is running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must
2172	If the current account (on balance of payments) is in deficit and household saving increases as a proportion of disposable income then the government could still run a fiscal surplus without a decline in output and income occurring.
1748	If the current account (on balance of payments) is in deficit and household saving increases as a proportion of disposable income then the government could still run a surplus without a decline in output and income occurring.
599	If the current account (on balance of payments) is in deficit and household saving increases as a proportion of disposable income then the government could still run a surplus without a decline in output and income occurring.
1140	If the ECB uses \overt monetary financing\ (OMF) to support the net public spending within the Eurozone, it would still require debt issuance if they wanted to target a non-zero policy interest rate.
75	If the economy has unemployed workers but cannot produce any more real output then the government
1859	If the European Commission relaxed the fiscal rules restricting Member State governments under the Stability and Growth Pact (3 per cent deficit to GDP ratios and 60 per cent public debt to GDP ratios) then the solvency risk that several EMU members faced during the GFC would have been resolved.
714	If the European Commission successfully alters the Treaty such that member states are forced to run balanced budgets and each year they successfully achieve that goal then the private sector in nations that run external deficits will always spend less than they earn.
841	If the European Commission successfully alters the Treaty such that member states are forced to run balanced budgets and each year they successfully achieve that goal then the private sector in nations that run external deficits will be always spend less than they earn.
189	If the European monetary system revised the Maastricht Treaty and eliminated the Stability and Growth pact conditions on the size of fiscal deficits and public debt relative to GDP then the Euro nations would once again be equivalent to (for example) the USA or Japan.
611	If the European Monetary Union (Eurozone) relaxed the budget restrictions on national governments that are applicable under the Stability and Growth Pact (3 per cent deficit to GDP ratios and 60 per cent public debt to GDP ratios) then the current solvency risk facing several EMU members would be resolved.
2306	If the expenditure multiplier is estimated to be 1.5, then if the government expands its spending by $100 billion, we expect GDP to rise by
2341	If the external balance is always in surplus, then the government can safely run a fiscal surplus and not impede economic growth.
2481	If the external balance is always in surplus, then the government can safely run a fiscal surplus and not impede economic growth.
1517	If the external balance is always in surplus, then the government can safely run a surplus and not impede economic growth.
1919	If the external balance is always in surplus, then the government can safely run a surplus and not impede economic growth.
342	If the external balance is always in surplus, then the government can safely run a surplus and not impede economic growth.
244	If the external balance is always in surplus, then the government can safely run a surplus and not impede economic growth. However, this option is only available to a few nations because not all nations can run external surpluses.
2042	If the external balance remains in surplus and is adding to total spending, then the national government can run a fiscal surplus without preventing economic growth from occurring.
1953	If the external balance remains in surplus, then the national government can run a fiscal surplus without impeding economic growth.
2112	If the external balance remains in surplus, then the national government can run a fiscal surplus without impeding economic growth.
418	If the external balance remains in surplus, then the national government will not impede economic growth by running a budget surplus.
496	If the external balance remains in surplus, then the national government will not impede economic growth by running a budget surplus.
1292	If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
1406	If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
1690	If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
1747	If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
668	If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
774	If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
1839	If the external sector is accumulating financial claims on the local economy (that is, providing foreign savings to the domestic economy) and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can both run surpluses without damaging employment growth.
1319	If the external sector is accumulating financial claims on the local economy (that is, providing foreign savings to the domestic economy) and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
1890	If the external sector is accumulating financial claims on the local economy (that is, providing foreign savings to the domestic economy) and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
905	If the external sector is accumulating financial claims on the local economy (that is, providing foreign savings to the domestic economy) and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
1173	If the external sector is always in surplus, then the government can safely run a surplus and not impede economic growth.
2270	If the external sector is always in surplus, then the government can safely run a surplus and not impede economic growth.
1213	If the external sector is generating a large surplus and is thus contributing strongly to growth, then the national government can safely run fiscal surpluses without impeding economic growth.
1062	If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then
2355	If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then
2498	If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then
350	If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then
1981	If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then both the private domestic sector and the government sector overall can reduce their overall respective net liabilities.
560	If the external sector is in deficit overall and GDP growth rate is lower than the real interest rate, then
1521	If the external sector is in deficit overall and real GDP growth rate is higher than the current real interest rate, then
1501	If the external sector is in surplus and thus is contributing to domestic economic growth, then the national government must run a fiscal surplus to stop the economy overheating.
2346	If the external sector overall is in deficit, it is still possible for the private domestic sector and government sector to run surpluses and each pay down its debt as long as GDP growth is fast enough (the technical condition is that the rate of GDP growth has to be faster than the real interest rate).
2489	If the external sector overall is in deficit, it is still possible for the private domestic sector and government sector to run surpluses and each pay down its debt as long as GDP growth is fast enough (the technical condition is that the rate of GDP growth has to be faster than the real interest rate).
258	If the external sector overall is in deficit, it is still possible for the private domestic sector and government sector to run surpluses and each pay down its debt as long as GDP growth is fast enough (the technical condition is that the rate of GDP growth has to be faster than the real interest rate).
1727	If the external sector overall is in deficit, it is still possible for the private domestic sector and government sector to run surpluses as long as GDP growth is fast enough (the technical condition is that the rate of GDP growth has to be faster than the real interest rate).
2047	If the external sector overall is in deficit, it is still possible for the private domestic sector and government sector to run surpluses as long GDP growth is fast enough (the technical condition is that the rate of GDP growth has to be faster than the real interest rate).
1151	If the external sector was running a surplus equivalent to 4 per cent of GDP, and the sum of all the private sector spending plans indicated it was desiring to run a surplus overall equivalent to 6 per cent, then the government could safely plan on achieving a budget surplus of 2 per cent of GDP.
999	If the external sector was running a surplus equivalent to 4 per cent of GDP, and the sum of all the private sector spending plans indicated it was desiring to run a surplus overall equivalent to 6 per cent, then the government could safely plan on achieving a budget surplus of 2 per cent of GDP.
2382	If the external sector was running a surplus equivalent to 4 per cent of GDP, and the sum of all the private sector spending plans indicated it was desiring to run a surplus overall equivalent to 6 per cent, then the government could safely plan on achieving a fiscal surplus of 2 per cent of GDP.
1485	If the fiscal balance of a currency-issuing national government moves into surplus
2064	If the fiscal deficit rises then government policy is becoming more expansionary.
86	If the flows from part-time employment to full-time employment are less than the flows from full-time employment to part-time employment then part-time employment must be rising.
1425	If the government abandons the practice of issuing bonds to the non-government sector to match its fiscal deficit, the latter will be less wealthy but have more cash.
1142	If the government achieves in reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
2233	If the government achieves in reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
2389	If the government achieves in reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
2398	If the government achieves in reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
2520	If the government achieves in reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
2532	If the government achieves in reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
1386	If the government achieves in reducing its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
736	If the government achieves in reducing its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
2239	If the government achieves its aim of reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
946	If the government increases its budget deficit as a percentage of GDP it reduces the real resources (crowds out) available for private productive uses.
689	If the government increases its budget deficit as a percentage of GDP it will squeeze the real resources available for private productive uses.
1338	If the government increases its fiscal deficit as a percentage of GDP it will always squeeze the real resources available for private productive uses.
2074	If the government increases its fiscal deficit as a percentage of GDP it will squeeze the real resources available for private productive uses.
2538	If the government increases its fiscal deficit as a percentage of GDP it will squeeze the real resources available for private productive uses.
29	If the Government introduced a permanent Job Guarantee (offer of minimum wage job to anyone who wanted it) then
211	If the government manages to balance its budget over a business cycle then the private domestic sector balance (I - S) will on average be in deficit exactly equal to the average current account deficit over the same period. In other words, if a nation has a current account deficit, then a balanced budget over the business cycle will force the private domestic sector overall to be building debt over that same cycle.
1310	If the government reduces its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
1367	If the government reduces its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
1699	If the government reduces its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
1785	If the government reduces its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
855	If the government reduces its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
996	If the government reduces its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
1761	If the government succeeds in reducing its net spending by say $10 billion, the net financial assets destroyed by this fiscal withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.
1889	If the government uses its fiscal policy instruments to maintain trend real GDP growth it will also ensure full employment is sustained.
300	If the Greek government decided to leave the EMU and restore their own currency they would have no solvency problems and could avoid an austerity program.
1804	If the growth in wages (the money you get paid) keeps pace with inflation which is accelerating at the same rate as labour productivity is growing then the profit share in GDP remains constant.
411	If the growth in wages (the money you get paid) keeps pace with inflation which is accelerating at the same rate as labour productivity is growing then the profit share in GDP remains constant.
2335	If the growth in wages (the money you get paid) keeps pace with inflation which is accelerating at the same rate as labour productivity is growing, then the profit share in GDP remains constant.
1163	If the household saving ratio and/or the nation's external deficit rises, there is no necessity for the government deficit to rise in order to maintain current output growth.
1285	If the household saving ratio rises and there is an external deficit then government must increase its fiscal deficit to fill the private spending gap or else national output and income will fall.
1261	If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
1668	If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
2212	If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
545	If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
792	If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
1398	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory (MMT) tells us that the government must increase net spending or else national output and income will fall.
686	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory (MMT) tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
1925	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory (MMT) tells us that the government must increase net spending to fill the spending gap or else national output and income will fall.
2058	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending or else national output and income will fall.
1158	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
2023	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
2103	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
2261	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
2345	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
2485	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
2555	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
257	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
347	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
512	If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
1492	If the household saving ratio rises and there is an external deficit, then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
1965	If the household saving ratio rises and there is an external deficit, then Modern Monetary Theory tells us that the government must increase net spending to fill the resulting increase in the non-government spending gap or else national output and income will fall.
1042	If the household saving ratio rises, then a nation with an external deficit will move towards recession unless government net spending offsets the contraction in demand.
2202	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then the public debt ratio will rise if the government deficit doubles, not that that observation is of any concern.
1739	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then the public debt ratio will rise if the government deficit doubles (say, from 2 to 4 per cent of GDP) although Modern Monetary Theory would not place any special importance in that increase.
654	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then the public debt ratio will rise if the government deficit doubles (say, from 2 to 4 per cent of GDP) although Modern Monetary Theory would not place any special importance in that increase.
1966	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then, under current institutional arrangements, the public debt ratio will always increase if the government deficit doubles (say, from 2 to 4 per cent of GDP) although Modern Monetary Theory would not place any special importance in that increase.
1637	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then under current institutional arrangements where governments match deficit spending with debt issuance to the private sector, the public debt ratio may fall even if the government deficit doubles (say, from 2 to 4 per cent of GDP).
1232	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then under current institutional arrangements where governments match deficit spending with debt issuance to the private sector, the public debt ratio will rise if the government deficit doubles (say, from 2 to 4 per cent of GDP).
891	If the inflation rate is steady and the central bank maintains a constant nominal interest rate, then under current institutional arrangements where governments match deficit spending with debt issuance to the private sector, the public debt ratio will rise if the government deficit doubles (say, from 2 to 4 per cent of GDP).
2344	If the monthly Labour Force data shows that employment grew by 400 in net terms over the last month, unemployment rose by 10,700, and the participation rate fell by 0.1 points then we can conclude that
2484	If the monthly Labour Force data shows that employment grew by 400 in net terms over the last month, unemployment rose by 10,700, and the participation rate fell by 0.1 points then we can conclude that
1655	If the national accounts of a nation reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP, then we know that national income adjustments would ensure that the fiscal balance was in
1561	If the national accounts of a nation reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP then we would also observe
921	If the national accounts of a nation reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP then we would also observe
12	If the national government has been paying off debt
127	If the national government is running a daily deficit then at the end of each day you have a positive stock of government net spending.
474	If the national government stopped issuing public debt then its deficit spending would be more expansionary than if it matched the deficits with new debt issues.
2157	If the national government stopped issuing public debt then its deficit spending would be no more expansionary than the current practice of non-government bank reserves through debt issuance.
2291	If the nation is running a current account deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit), then the private domestic sector must be spending less than they are earning.
880	If the nation is running a current account deficit of 2 per cent of GDP and the government runs a surplus equal to 2 per cent of GDP, then we know that at the current level of GDP, the private domestic sector is not saving.
1448	If the nation is running a current account deficit of 2 per cent of GDP and the government runs a surplus equal to 2 per cent of GDP, then we know that at the current level of GDP, the private domestic sector is not saving overall.
1723	If the nation is running a current account deficit of 2 per cent of GDP and the government runs a surplus equal to 2 per cent of GDP, then we know that at the current level of GDP, the private domestic sector is spending less than it is earning.
2193	If the nation is running a current account deficit of 2 per cent of GDP and the government runs a surplus equal to 2 per cent of GDP, then we know that at the current level of GDP, the private domestic sector is spending more than they are earning.
646	If the nation is running a current account deficit of 2 per cent of GDP and the government runs a surplus equal to 2 per cent of GDP, then we know that at the current level of GDP, the private domestic sector is spending more than they are earning.
883	If the nation is running a current account deficit, then domestic households and firms and the government cannot simultaneously reduce their levels of indebtedness.
1633	If the nation is running a current account deficit, then domestic households and firms and the government cannot simultaneously spend less than their income.
442	If the nation is running a current account deficit which is accompanied by a government sector surplus of equal proportion to GDP, then the private domestic sector is spending more than they are earning and increasing its indebtedness.
1495	If the nation is running a current account deficit which is accompanied by a government sector surplus of equal size, then the private domestic sector will always be spending more than its income.
2140	If the non-government sector desires to net save in the currency of issue and acts accordingly, national income (GDP) adjustments will ensure the government sector is in deficit, irrespective of the intentions of the government.
92	If the non-government sector desires to net save in the currency of issue and acts accordingly, national income (GDP) adjustments will ensure the government sector is in deficit, irrespective of the intentions of the government.
117	If the non-government sector had a positive desire to save and the economy was at full employment, then in the absence of central bank intervention, the overnight interest rate would fall to zero.
715	If the OECD/IMF output gap measures are biased downwards, then other things equal, we will conclude that the government's discretionary fiscal stance is more expansionary than it actually is.
2301	If the output an economy can achieve when all resources are productively employed is $120 billion and in the current year actual real GDP is on $114 billion, the output gap would be
1838	If the private domestic sector is locked into a process of deleveraging, then to avoid the employment losses arising from this lost private spending, governments have to expand public deficits.
500	If the private domestic sector spends less than it earns and the nation runs a small external deficit, then the government budget will always be in deficit at all levels of national income.
1793	If the private domestic sector spends less than it earns and the nation runs a small external deficit, then the government fiscal balance will always be in deficit at all levels of national income.
1488	If the private domestic sector spends less than it earns and the nation runs a small external deficit, then the government fiscal position will always be in deficit at all levels of national income.
1101	If the private domestic sector spends less than it earns overall and the nation runs a small external deficit, then the government can never achieve a budget surplus no matter what the level of national income.
133	If the prudential regulation authority requires all authorised deposit-taking institutions to hold a certain proportion of their assets in the form of government bonds then this amounts to a small government tax on those institutions.
1831	If the real interest rate (difference between nominal interest rate and inflation) is constant, then a currency-issuing government, which matches its net spending $-for-$ with debt issuance, could double its fiscal deficit without pushing up the public debt ratio.
2282	If the real interest rate (difference between nominal interest rate and inflation) is constant, then a currency-issuing government, which matches its net spending $-for-$ with debt issuance, could double its fiscal deficit without pushing up the public debt ratio.
807	If the real interest rate (difference between nominal interest rate and inflation) is constant, then a currency-isuing government, which matches its net spending $-for-$ with debt issuance, could double its budget deficit without pushing up the public debt ratio.
1434	If the real interest rate (difference between nominal interest rate and inflation) is constant, then a currency-isuing government, which matches its net spending $-for-$ with debt issuance, could double its fiscal deficit without pushing up the public debt ratio.
100	If there is a current account deficit, and the domestic private sector seeks to increase its saving as a percentage of GDP, then income adjustments will ensure the government budget is in deficit.
285	If there is a current account deficit, and the domestic private sector seeks to increase its saving as a percentage of GDP, then income adjustments will ensure the government budget is in deficit.
1620	If there is an external (current account) deficit, then government deficits are required if private households are to save.
1167	If there is an external deficit, and the domestic private sector successfully increases its overall saving as a percentage of GDP, then income adjustments will ensure the government fiscal balance is in deficit.
2264	If there is an external deficit, and the private domestic sector successfully increases its overall saving as a percentage of GDP, then income adjustments will always ensure the government fiscal balance is in deficit.
2557	If there is an external deficit, and the private domestic sector successfully increases its overall saving as a percentage of GDP, then income adjustments will always ensure the government fiscal balance is in deficit.
1940	If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP to even higher levels, will ensure the government fiscal balance is in deficit, irrespective of what the government desires.
1004	If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP, will ensure the government budget is in deficit, irrespective of what the government desires.
537	If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP, will ensure the government budget is in deficit, irrespective of what the government desires.
1372	If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP, will ensure the government fiscal balance is in deficit, irrespective of what the government desires.
1312	If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP, will ensure the government fiscal position is in deficit, irrespective of what the government desires.
2427	If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP, will ensure the government fiscal position is in deficit, irrespective of what the government desires.
1362	If there is an external deficit of 2 per cent of GDP and the government achieves a fiscal balance then the private domestic sector will have
550	If there is an external deficit of 2 per cent of GDP and the government balances its budget then the private sector will have
1559	If there is an external deficit of 2 per cent of GDP and the government balances its fiscal outcome then the private sector will have an excess of spending relative to its income equal to 2 per cent of GDP.
1264	If there is an external deficit of 2 per cent of GDP and the government balances its fiscal position then private capital formation
2215	If there is an external deficit of 2 per cent of GDP and the government balances its fiscal position then private capital formation
1287	If there is an external deficit of 2 per cent of GDP and the government balances its fiscal position then the private sector will have a an excess of spending relative to its income equal to 2 per cent of GDP.
2417	If there is an external deficit, then government deficits are required if private households are to save.
2154	If there is more \money\ in the economy its value always declines.
2447	If there is more money in the economy its value always declines.
401	If there is more \money\ in the economy its value declines.
986	If there is more \money\ in the economy its value declines.
1897	If there is more \money\ in the economy its value inevitably declines.
2059	If there is more \money\ in the economy its value inevitably declines.
1546	If there is more \money\ in the economy its value will decline.
1778	If there is more \money\ in the economy its value will decline.
403	If there was a fiscal rule imposed such that the national government had to balance its budget at all times then this would also eliminate the sensitivity of the budget outcome to the automatic stabilisers.
2060	If there was a fiscal rule imposed such that the national government had to balance its fiscal position at all times then this would also eliminate the sensitivity of the fiscal outcome to the automatic stabilisers.
2156	If there was a fiscal rule imposed such that the national government had to balance its fiscal position at all times then this would also eliminate the sensitivity of the outcome to the automatic stabilisers.
1898	If there was a fiscal rule imposed such that the national government had to match its expenditure and taxation revenue at all times then this would also eliminate the sensitivity of the fiscal outcome to the automatic stabilisers.
1428	If the share in national income that workers receive (the wage share) falls then their real standard of living is reduced.
861	If the share in national income that workers receive (the wage share) falls then their real standard of living is reduced.
1943	If the share of wages in national income falls then the workers' material standard of living also falls.
954	If the share of wages in national income falls then the workers' standard of living falls.
1130	If the stock of aggregate demand exceeds the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
917	If the stock of aggregate demand exceeds the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
1267	If the stock of aggregate demand growth outstrips the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
2218	If the stock of aggregate demand growth outstrips the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
556	If the stock of aggregate demand growth outstrips the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
802	If the stock of aggregate demand growth outstrips the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
1417	If the stock of aggregate spending in the economy exceeds the capacity of the productive sector to respond by producing extra real goods and services then inflation is inevitable.
44	If the structural budget balance is in surplus but the overall budget is in deficit
1087	If the trend to austerity led to all national governments simultaneously running public surpluses then it would be impossible for all their respective private domestic sectors to save overall.
16	If the unemployment rate is rising it means
268	If the US budget deficit keeps rising to meet the need for more fiscal stimulus, it would have to bear the political costs of a rising public debt ratio. This is one of the reasons the US government is talking about reducing net spending.
352	If the US budget deficit keeps rising to meet the need for more fiscal stimulus, the US government would have to bear the political costs of a rising public debt ratio.
2147	If wages keep pace with inflation, which is accelerating at the same rate as labour productivity then the share of wages in GDP remains unchanged.
1551	If we assume that inflation and nominal interest rates are both zero and constant (not to different to reality), and consider a country with a public debt to GDP ratio of 100 per cent which the mainstream economists consider to be dangerously high. The mainstream prescription is to run primary fiscal surpluses (public spending net of interest payments greater than tax revenue) to stabilise and then reduce the debt ratio. Under the circumstances given, this strategy will only work if there is real GDP growth to generate the necessary extra tax revenue.
406	If we assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting then if government spending increases by $X dollars and private investment and exports are unchanged nominal income will continue growing until the sum of taxation revenue, import spending and household saving rises by more than $X dollars because of the multiplier.
2376	If we assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting then if government spending increases by $X dollars and private investment and exports are unchanged, the sum of changes to taxation revenue, import spending and household saving will be greater than $X dollars because of the expenditure multiplier.
791	If we observed yields on 10-year bond yields rising it would be incorrect to conclude that bond markets are demanding increased risk premiums for these assets.
1215	If we observed yields on 10-year government bond yields rising, we could not categorically state that bond markets are demanding increased risk premiums for these assets.
2185	If we observe falling government bond yields then we can assume that investors are viewing sovereign debt less favourably.
1873	If we observe rising yields on 10-year government bond yields then we can safely conclude that bond investors are demanding increased risk premiums for these assets.
2070	If workers are to get a larger share of GDP then their wages have to grow faster than inflation.
1144	If workers cannot maintain nominal wages growth equal to the growth in labour productivity, then their real wages fall.
2403	If workers desire real wage gains then they must maintain nominal wages growth equal to the growth in labour productivity.
2525	If workers desire real wage gains then they must maintain nominal wages growth equal to the growth in labour productivity.
1069	If workers (on average across the economy) suffer real wage losses because their nominal wages fail to keep pace with the inflation rate then a greater share of national income is going to profits.
1103	If workers secure wage increases in line with the growth in their contribution to production their share in national income will be stable.
1105	If workers succeed in gaining real wages increases then, other things equal, the share of profits in national income is squeezed.
862	If workers succeed in gaining real wages increases then, other things equal, the share of profits in national income is squeezed.
1891	If yields rise on new bond issues then deficit spending by a currency-issuing government becomes more expensive.
907	If yields rise on new bond issues then deficit spending by a currency-issuing government becomes more expensive.
2308	If you observed the following conditions, which would be consistent with a stable GDP level?
585	Ignoring any reserve requirements, a central bank will eliminate any need to conduct open market operations to ensure its target policy rate is achieved each day by paying a positive interest rate on overnight reserves.
827	Ignoring any reserve requirements, a central bank will eliminate any need to conduct open market operations to ensure its target policy rate is achieved each day by paying a positive interest rate on overnight reserves.
1711	Ignoring any reserve requirements, a central bank will eliminate any need to conduct open market operations to sustain its target policy rate merelyby paying a positive return on excess overnight reserves.
586	Ignoring any reserve requirements, bank reserves will be higher than otherwise if the central bank pays a positive return on overnight reserves held by the commercial banks equal to its current policy rate.
828	Ignoring any reserve requirements, bank reserves will be higher than otherwise if the central bank pays a positive return on overnight reserves held by the commercial banks equal to its current policy rate.
432	Ignoring any reserve requirements, if the central bank pays a positive interest rate on overnight reserves then it no longer has to conduct open market operations to ensure its policy rate is sustained.
1737	Ignoring any reserve requirements that might be imposed, if the central bank pays a positive interest rate on overnight reserves held by the commercial banks then it may still have to conduct open market operations as a means of ensuring that levels of bank reserves are consistent with its policy target rate of interest.
2196	Ignoring any reserve requirements that might be imposed, if the central bank pays a positive interest rate on overnight reserves held by the commercial banks then it may still have to conduct open market operations as a means of ensuring that levels of bank reserves are consistent with its policy target rate of interest.
650	Ignoring any reserve requirements that might be imposed, if the central bank pays a positive interest rate on overnight reserves held by the commercial banks then it may still have to conduct open market operations as a means of ensuring that levels of bank reserves are consistent with its policy target rate of interest.
433	Ignoring any reserve requirements, the payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend increase the overall level of reserves held by the latter.
1020	Ignoring laws to the contrary, a central bank currently targetting a 2 per cent short-term policy rate, cannot directly purchase treasury debt to facilitate the national governments budget deficit (that is, \monetise the deficit\) and continue to maintain its policy rate at 2 per cent.
900	Ignoring laws to the contrary, a central bank currently targetting a 2 per cent short-term policy rate, cannot directly purchase treasury debt to facilitate the national governments budget deficit (that is, \monetise the deficit\) and continue to maintain its policy rate at 2 per cent.
1253	Ignoring laws to the contrary, a central bank currently targetting a 2 per cent short-term policy rate, cannot directly purchase treasury debt to facilitate the national governments fiscal deficit (that is, \monetise the deficit\) and continue to maintain its policy rate at 2 per cent.
2437	Ignoring laws to the contrary, a central bank currently targetting a 2 per cent short-term policy rate, cannot directly purchase treasury debt to facilitate the national governments fiscal deficit (that is, \monetise the deficit\) and continue to maintain its policy rate at 2 per cent.
769	Ignoring laws to the contrary, a central bank currently targetting a 3 per cent short-term policy rate, cannot directly purchase treasury debt to facilitate the national governments budget deficit (that is, \monetise the deficit\) because otherwise it would lose control of its policy target.
1196	Ignoring political reality, the central bank in a currency-issuing nation could still increase interest rates even if the government instructed it to directly purchase treasury debt to facilitate the national governments fiscal deficit.
1183	Imagine that macroeconomic policy is geared towards keeping real GDP growth on a 3 per cent per annum trend. If labour productivity is growing at 2 per cent per annum, the labour force is growing at 1.5 per cent per annum, and the average working week is constant in hours, then this policy regime will result in
1605	Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then the policy-driven trend will lead to a falling unemployment rate.
450	Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then the policy-driven trend will lead to a falling unemployment rate.
1661	Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then this policy regime will result in
1921	Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then this policy regime will result in
2054	Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then this policy regime will result in
250	Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then this policy regime will result in
1195	Imagine that the government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x and a spending increase of $x. Which policy option will have the greater initial impact on aggregate demand?
171	Imagine the national government ran a surplus (tax revenue greater than spending) last year of say $20 billion and then electronically deposited the sum in a local commercial bank such that it now had a $20 billion bank balance in the private sector. This is one example where a budget surplus would contribute to national saving and allow the government to purchase more next period for a given tax take.
2217	Imagine we forecast real GDP growth for a nation to grow by 0.8 per cent in 2021 and 1.1 per cent in 2022. We also predict that the unemployment rate would fall from 11.7 per cent in 2021 to 11.4 per cent in 2022. Additionally, average annual growth in labour productivity has been running at just over 1 per cent per annum (GDP per hours worked). If average weekly hours worked remains constant over 2022, then the implication of our forecasts is that we think the labour force of this nation in 2022 will
1519	Imposing some positive minimum reserve requirements constrains the credit creation activities of the private banks relative to a situation where no requirements were set other than the rule that reserve balances could not be negative.
546	Imposing some positive minimum reserve requirements for private banks provides some constraint on their credit creation activities.
1663	In 1998, Russia defaulted on its outstanding domestic debt because it temporarily ran out of rubles due to the currency peg it was running with the US dollar.
1182	In 1998, Russia was forced to default on its outstanding public debt after it faced a major collapse of oil prices in world markets which negated its capacity to repay foreign currency-denominated loans via net exports. But the defaults were ultimately due to the currency peg against the US dollar that they voluntarily had put in place.
265	In 2001, Japan defied the ratings agencies who had downgraded their sovereign debt. They refused to alter their fiscal commitments despite constant pressure to cut the deficit. Given that countries such as Greece and Portugal are unlikely to be expelled from the EMU if they continue to exceed the Stability and Growth Pact conditions, they should similarly resist the demands of the ratings agencies for increased fiscal austerity and thus spread their fiscal adjustment over a longer period which would inflict less damage on their nations.
2310	In 2008, the consumer price level in Zimbabwe rose by 157 per cent. Between 1998 and 2008, real GDP fell by 50.7 per cent. The hyperinflation arose mainly because
213	In a 100-percent reserve banking system, some depositors may agree to fixed-term deposits to allow the bank to lend their money for the duration of the term. While this would allow for some credit creation the system would not face the same risks that burden the \fractional reserve deposit\ system because the banking system would always be able to pay depositors on demand (or when the fixed-terms expired).
80	In a \balanced sheet recession\, aggregate demand falls
922	In a currency-issuing nation, real surpluses must be expropriated from productive workers to feed the unemployed.
119	In a deflationary environment, the real interest rate will eventually rise as long as the central bank does not introduce negative overnight rates.
2079	In a fiat monetary system (for example, US or Australia) with an on-going external deficit and fiscal deficit that is smaller than the external sector, then the domestic private sector is in
141	In a fiat monetary system (for example, US or Australia) with an on-going external deficit, if you desire the domestic private sector to reduce its overall debt levels without employment losses,  then you have to support the national government continually increasing the budget deficit in line with the private de-leveraging process.
320	In a fiat monetary system (for example, US or Australia) with an on-going external deficit, if you desire the domestic private sector to reduce its overall debt levels without employment losses, then you have to support the national government continually increasing the budget deficit in line with the private de-leveraging process.
396	In a fiat monetary system (for example, US or Australia) with an on-going external deficit, if you desire the domestic private sector to reduce its overall debt levels without employment losses, then you have to support the national government continually increasing the budget deficit in line with the private de-leveraging process.
2370	In a fiat monetary system (for example, US or Australia) with an on-going external deficit, if you desire the domestic private sector to reduce its overall debt levels without employment losses, then you have to support the national government increasing the fiscal deficit beyond the size of the external deficit in line with the private de-leveraging process.
1411	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private domestic sector cannot reduce its overall debt levels by increasing its net saving without incurring income losses.
1472	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private sector cannot bring its spending more closely in line with its income by increasing saving without incurring employment losses.
1892	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private sector cannot reduce its overall debt levels (by overall saving) without incurring employment losses and pushing the public deficit higher and the external deficit lower.
2440	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private sector cannot reduce its overall debt levels (by saving) without incurring employment losses.
777	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private sector cannot reduce its overall debt levels (by saving) without incurring employment losses.
908	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private sector cannot reduce its overall debt levels (by saving) without incurring employment losses.
1871	In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the private domestic sector cannot reduce its overall debt levels (by overall saving) without incurring employment losses.
459	In a fiat monetary system (for example, US or Australia) with an on-going external deficit, the domestic private sector can reduce its overall debt levels (by saving) without employment losses, if the national government supports the private de-leveraging process by running a budget deficit.
162	In a fiat monetary system, government borrowing will push the interest rate up.
142	In a fiat monetary system, national government spending is not revenue constrained. But there are also circumstances when the non-government sector spending is similarly not constrained by available revenue. An example is if the local lunch shop where I go every day allows me to take my sandwiches before I go to the bank to get some cash.
1991	In a fiat monetary system, the absence of currency convertibility means
53	In a fiat monetary system, the concept of debt monetisation is inapplicable because
2510	In a fiat monetary system with an on-going external deficit, if a government wants the domestic private sector to reduce its overall debt levels without employment losses, then it has increase its fiscal deficit beyond the size of the external deficit.
2091	In a fiat monetary system with an on-going external deficit, the domestic private sector cannot save overall, if the national government runs a fiscal deficit.
1996	In a fixed coupon government bond auction, the higher is the demand for the bonds
2151	In a fixed coupon government bond auction, the higher is the demand for the bonds
315	In a fixed coupon government bond auction, the higher is the demand for the bonds
82	In a fixed coupon government bond auction, the higher is the demand for the bonds
1843	In a fixed coupon government bond auction, the higher is the demand for the bonds the
2139	In a fixed coupon government bond auction, the higher is the demand for the bonds, the higher the yields will be at that asset maturity which suggests that larger fiscal deficits will eventually drive short-term interest rates down
1022	In a fixed coupon government bond auction, the higher is the demand for the bonds the lower the yields will be at that asset maturity which suggests that higher budget deficits will eventually drive short-term interest rates down.
717	In a fixed coupon government bond auction, the higher is the demand for the bonds the lower the yields will be at that asset maturity which suggests that higher budget deficits will eventually drive short-term interest rates down.
844	In a fixed coupon government bond auction, the higher is the demand for the bonds the lower the yields will be at that asset maturity which suggests that higher budget deficits will eventually drive short-term interest rates down.
969	In a fixed coupon government bond auction, the higher is the demand for the bonds the lower the yields will be at that asset maturity which suggests that higher budget deficits will eventually drive short-term interest rates down.
2454	In a fixed coupon government bond auction, the higher is the demand for the bonds the lower the yields will be at that asset maturity, which suggests that higher fiscal deficits will eventually drive short-term interest rates down.
121	In a mainstream macroeconomics model there can be no general overproduction (unsold goods) and therefore no unemployment if the real interest rate is allowed to adjust freely to match unconsumed income with the intentions of investors.
471	In a modern monetary economy the monetary base always adjusts to the changes in the money supply.
1945	In a nation running an on-going external deficit, if the private domestic sector decides to increase the extent that it spends less than its overall income, then the national government has to increase its discretionary fiscal deficit in order to avoid rising employment losses.
424	In an endogenous money system, a central bank cannot reduce bank lending while maintaining its target monetary policy rate by increasing the rate that provides reserves to the commercial banks.
761	In an endogenous money system a central bank cannot simultaneously reduce bank lending and maintain a given positive target interest rate by increasing the rate that it provides reserves on demand to the commercial banks.
2455	In a situation where the private domestic sector decides to increase its overall saving, the economy can still grow even if the national government had decided to impose fiscal austerity.
1593	In a situation where the private domestic sector decides to lift its overall saving rate we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
1023	In a situation where the private domestic sector decides to lift its saving ratio, the economy can still grow even if the national government had decided to impose fiscal austerity.
138	In a situation where the private domestic sector decides to lift its saving ratio we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
319	In a situation where the private domestic sector decides to lift its saving ratio we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
718	In a situation where the private domestic sector decides to lift its saving ratio we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
2150	In a situation where the private domestic sector embarks on an attempt to lift its overall saving ratio, we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
1545	In a standard fixed coupon government bond auction, the higher is the demand for the bonds
1465	In a stock-flow consistent macroeconomics, the sectoral balance stocks all sum to zero.
1704	In a stock-flow consistent macroeconomics, the sectoral balance stocks all sum to zero.
1752	In a stock-flow consistent macroeconomics, the sectoral balance stocks all sum to zero.
2176	In a stock-flow consistent macroeconomics, the sectoral balance stocks all sum to zero.
606	In a stock-flow consistent macroeconomics, the sectoral balance stocks all sum to zero.
1536	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate demand (spending) which in turn impacts on GDP.
1174	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate demand which in turn impacts on GDP.
2052	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate demand which in turn impacts on GDP.
247	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate demand which in turn impacts on GDP.
2001	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate spending which in turn impacts on GDP.
2342	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate spending which in turn impacts on GDP.
2482	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of flows that adds to the stock of aggregate spending which in turn impacts on GDP.
2271	In a stock-flow consistent macroeconomics, we have to always trace the impact of flows during a period on the relevant stocks at the end of the period. Accordingly, if household consumption expenditure out of disposable income rises by 80 cents in each extra dollar received, then the residual will flow into the stock of saving.
2194	In a stock-flow consistent macroeconomics, we know that flows during a period add to relevant stocks. Accordingly, if the flow of government spending rose by $100 billion in total, then if nothing else changes the stock of aggregate demand would also rise by $100 billion in the first instance (before the multiplier starts to work).
647	In a stock-flow consistent macroeconomics, we know that flows during a period add to relevant stocks. Accordingly, if the flow of government spending rose by $100 billion in total, then if nothing else changes the stock of aggregate demand would also rise by $100 billion in the first instance (before the multiplier starts to work).
444	In a stock-flow consistent macroeconomics, we know that flows during a period add to relevant stocks at the end of the period. Accordingly, government and private investment spending are two examples of spending flows that add to the stock of aggregate demand which in turn impacts on Gross Domestic Product (National Income) because spending equals income.
502	In a stock-flow consistent macroeconomics, we know that flows during a period add to relevant stocks at the end of the period. Accordingly, government spending and private consumption spending are two examples of spending flows that add to the stock of aggregate demand which in turn impacts on Gross Domestic Product (National Income) because spending equals income.
168	Income adjustments would force the government to run a deficit equivalent to 8 per cent of GDP if the private domestic sector was spending less than its income by an amount equivalent to 5 per cent of GDP and the country was running a current account surplus of only 3 per cent of GDP.
1166	Increasing tax revenue provides the government with more capacity to spend.
21	In February 2009, the unemployment rate was 5.7 per cent. If over the next 12 months GDP growth is -1 per cent (as expected), and the labour force growth slows to 1.6 per cent per annum and labour productivity growth is a flat 0.5 per cent per annum, then we would expect the unemployment in February 2010 to be approximately
2353	Inflation fears are being hawked at the present by the financial media. But a potential problem with running continuous fiscal deficits is that the spending builds up over time which adds to inflationary pressures.
1958	In general, the estimates of the cyclical position of the fiscal balance provided by organisations such as OECD, the IMF and the US Congressional Budget Office are biased downwards.
2426	. In general, the estimates provided by the organisations such as the OECD and IMF of the impact of the automatic stabilisers are biased downwards.
1003	In general, the estimates provided by the organisations such as the OECD and IMF of the impact of the automatic stabilisers are biased upwards.
1939	In general, the estimates provided by the organisations such as the OECD and IMF of the impact of the automatic stabilisers are biased upwards.
536	In general, the OECD and IMF estimates of the impact of the automatic stabilisers are biased downwards.
1371	In general, the OECD and IMF estimates of the impact of the automatic stabilisers attached to the fiscal balance are biased downwards.
2161	In general, the OECD and IMF estimates of the impact of the automatic stabilisers in-built into fiscal policy are biased downwards.
753	In its latest Monthly Budget Review, the US Congressional Budget Office announced that the US \federal budget deficit was $320 billion for the first quarter of fiscal year 2012 ... $49 billion less than the deficit recorded in the same period in fiscal year 2011\. Without knowing anything further, you would conclude that the US government has been cutting its discretionary net spending.
758	In its latest World Economic Outlook Update (issued January 2012), the IMF said that \countries should let automatic stabilizers operate freely for as long as they can readily finance higher deficits\. In general, the IMF estimates of these automatic stabilisers are biased upwards.
833	In last week's 2012-13 Budget, the Australian government indicated that it aimed to achieve a budget surplus of 0.1 per cent of GDP in the next financial year. The aim underpins a massive fiscal shift from a budget deficit of around 3 per cent of GDP in 2011-12. If the actual budget outcome remains in deficit at the end of the next financial year the Australian government will be rightly considered not to have gone hard enough on its fiscal austerity plans.
773	In many nations, private households are increasing their saving ratios (from disposable income) and firms are declining to invest. These trends indicate that budget deficits have to be higher to avoid further employment losses.
667	In many nations, private households are increasing their saving ratios (from disposable income) and firms are declining to invest. To avoid employment losses, these developments signal the need for expanding public deficits.
1102	In most nations at present, both the government and the private domestic sectors are carrying historically large debt ratios. However, under current public sector debt-issuance arrangements and given the national accounting relations, only one of these sectors can reduce its debt level at a time.
2418	In most nations at present, both the government and the private domestic sectors are carrying historically large debt ratios. However, under current public sector debt-issuance arrangements, only one of these sectors can reduce its debt level at a time.
632	In recent days we have observed falling government bond yields in most non-EMU nations which suggests that investors are viewing sovereign debt less favourably since the downgrading of the US rating.
1075	In recent days, yields on Portugal government bonds have risen sharply and have once again raised the issue that Eurozone governments face insolvency risk. If, for example, Portugal was to leave the Eurozone and in re-establishing its own floating currency, it re-denominated all euro liabilities into this new currency, then they would eliminate that risk on all future liabilities.
1574	In recent months, we have observed falling government bond yields in most nations which suggests that investors are viewing sovereign debt less favourably as the levels of outstanding debt rises.
1706	In terms of the initial impact on national income, a tax increase which aims to increase tax revenue at the current level of national income by $x is less damaging than a spending cut of $x?
1745	In terms of the initial impact on national income, a tax increase which aims to increase tax revenue at the current level of national income by $x is less damaging than a spending cut of $x?
665	In terms of the initial impact on national income, a tax increase which aims to increase tax revenue at the current level of national income by $x is less damaging than a spending cut of $x?
822	In the absence of exchange rate flexibility, the Eurozone member states are undertaking painful internal devaluation designed to deflate nominal wages and prices to facilitate increased external competitiveness. The aim, say for Greece, is to reduce its real unit labour costs faster than their trading partners can. For the logic to follow then if wages and prices fall at the same rate, labour productivity has to rise and employment has to fall.
1676	In the absence of exchange rate flexibility, the Eurozone member states have to use painful internal devaluation designed to deflate nominal wages and prices in order to facilitate increased external competitiveness. If wages and prices fall at the same rate, then, for the logic to follow, labour productivity has to rise and employment has to fall.
1599	In the context of population ageing, a currency-issuing sovereign government can always provide first-class health care to its citizens even in the face of rising dependency ratios.
425	In the context of population ageing, the fact that a sovereign government is never financially constrained may become irrelevant in terms of their capacity to provide first-class health care and pensions given rising dependency ratios.
2192	In the context of population ageing, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its citizens.
643	In the context of population ageing, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its citizens.
1720	In the context of population ageing, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its citizens should it desire to do so.
1475	In the context of population ageing, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its citizens should the political circumstances permit.
762	In the context of population ageing, the fact that a sovereign government is never financially constrained means that it will always be able to provide first-class health care.
248	In the current macroeconomic debate, considerable attention is being focused on the public debt to GDP ratio with some mainstream economists claiming that a ratio of 80 per cent is a dangerous threshold that should not be passed. They therefore advocate that governments run primary surpluses (taxation revenue in excess of non-interest government spending) to start reducing the debt ratio. Modern monetary theory tells us that while a currency-issuing government running a deficit can never reduce the debt ratio it doesn't matter anyway because such a government faces no risk of insolvency.
1801	In the endogenous money system that exists today, a central bank cannot simultaneously reduce bank lending and maintain a given positive target interest rate by increasing the rate that it provides reserves on demand to the commercial banks.
256	In the February Labour Force data for Australia released last Thursday, we learned that employment grew by only 400 in net terms during the month of February. Other highlights were that unemployment rose by 10,700 and that the labour force participation rate fell by 0.1 per cent indicating a rise in the proportion leaving the labour force. Taken together this data tells you that
76	In the modern parlance, a liquidity trap  occurs when
190	In the November Labour Force Survey results for Australia we read that full-time employment growth accounted for nearly 100 per cent of the net jobs growth and monthly hours of work jumped upwards. This means that underemployment is falling.
629	In the recent British riots, a common claim has been that the rioters were unemployed youth on income support benefits who were living off the hard work of those who pay taxes.  This claim has validity.
2086	In the recent European Commission <em> Autumn 2019 Economic Forecast</em> we learned that many nations, still carrying elevated levels of unemployment were judged to be operating at over-full capacity. This tells us that the Commission's structural deficit estimates are typically
2051	In the same way the spending multiplier indicates the extent to which GDP rises when there is a given rise in government spending, the tax multiplier captures the impact of rising tax rates on GDP as people reduce their labour supply because of the disincentives associated with taxation.
245	In the same way the spending multiplier indicates the extent to which GDP rises when there is a given rise in government spending, the tax multiplier captures the impact of rising tax rates on GDP as people reduce their labour supply because of the disincentives associated with taxation.
1900	In the wake of a rising household saving ratio, a nation with an external deficit will enter recession unless government net spending increases.
1359	In the wake of a rising household saving ratio, a nation with an external deficit will move towards recession unless government net spending increases.
936	In the wake of a rising household saving ratio, a nation with an external deficit will move towards recession unless government net spending increases.
1683	In this week's 2017-18 Fiscal Statement, the Australian government indicated that it aimed to achieve a fiscal surplus of 0.4 per cent of GDP by 2020-21 and trim the deficit every financial year in between. If the actual fiscal outcome remains in deficit by 2020-21, the Australian government will be rightly considered not to have gone hard enough on its fiscal austerity plans.
898	Introducing a system of 100 per cent reserve requirements on the banks will restore the central bank's capacity to control the money supply.
1641	Introducing a system of 100 per cent reserve requirements on the commercial banks would give the central bank control of the money supply.
20	Introducing more sophisticated training programs for unemployed workers during a recession
728	In Year 1, the economy goes into recession with nominal GDP growth falling to minus -1 per cent for the year. The inflation rate is subdued at 1 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The governments primary budget deficit is recorded as 1 per cent of GDP and the debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and pushes the budget deficit (net of interest payments) out to 2 per cent of GDP. This discretionary fiscal decision stimulates aggregate demand and the economy recovers with a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the rate of increase in the debt ratio will fall by an amount less than the rise in the budget deficit because of the real growth in the economy.
1116	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1.0 per cent. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The inflation rate is stable at 1 per cent per annum. The government's primary budget balance records a deficit equivalent to 1 per cent of GDP and the public debt ratio rises by 3 per cent. In Year 2, the government pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will fall in Year 2.
835	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1.0 per cent. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The inflation rate is stable at 1 per cent per annum. The government's primary budget balance records a deficit equivalent to 1 per cent of GDP and the public debt ratio rises by 3 per cent. In Year 2, the government pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the budget deficit because of the real growth in the economy.
945	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1.0 per cent. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The inflation rate is stable at 1 per cent per annum. The government's primary budget balance records a deficit equivalent to 1 per cent of GDP and the public debt ratio rises by 3 per cent. In Year 2, the government pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the budget deficit because of the real growth in the economy.
2113	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 1 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). As a result of the recession, the government's fiscal balance, net of interest payments, goes into deficit equivalent to 1 per cent of GDP and the public debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and doubles the primary fiscal deficit relative to GDP, and, in doing so, stimulates aggregate demand such that the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the fiscal deficit because of the real growth in the economy.
553	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 1 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio
498	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 1 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the budget deficit because of the real growth in the economy.
628	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 1 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 3 per cent.\n\nIn Year 2, the government stimulates the economy and pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will fall because of the real growth in the economy.
1086	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 2 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 4 per cent. In Year 2, the government introduces a fiscal stimulus and pushes the primary budget deficit out to 3 per cent of GDP to head of a recession. In doing so it stimulates aggregate demand and nominal GDP growth rises to 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant and inflation is stable. In Year 3, there is no change in monetary policy, and the government expands fiscal policy by an additional 1 per cent of GDP. Inflation is stable and nominal GDP growth rises to 6 per cent. From this data, you can conclude that
1083	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 2 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 4 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 4 per cent of GDP in recognition of the severity of the recession. In doing so it stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant but inflation falls to 1 per cent given the slack nature of the economy the previous year. Under these circumstances, the public debt ratio falls even though the budget deficit has risen because of the real growth in the economy.
583	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 2 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 4 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 4 per cent of GDP in recognition of the severity of the recession. In doing so it stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant but inflation falls to 1 per cent given the slack nature of the economy the previous year. Under these circumstances, the public debt ratio falls even though the budget deficit has risen because of the real growth in the economy.
820	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 2 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 4 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 4 per cent of GDP in recognition of the severity of the recession. In doing so it stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant but inflation falls to 1 per cent given the slack nature of the economy the previous year. Under these circumstances, the public debt ratio falls even though the budget deficit has risen because of the real growth in the economy.
925	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 2 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 4 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 4 per cent of GDP in recognition of the severity of the recession. In doing so it stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant but inflation falls to 1 per cent given the slack nature of the economy the previous year. Under these circumstances, the public debt ratio falls even though the budget deficit has risen because of the real growth in the economy.
1675	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 2 per cent (and this is the rate the government pays on all outstanding debt). The government's fiscal balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 4 per cent. In Year 2, the government stimulates the economy and pushes the primary fiscal deficit out to 4 per cent of GDP in recognition of the severity of the recession. In doing so it stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant but inflation falls to 1 per cent given the slack nature of the economy the previous year. Under these circumstances, the public debt ratio falls even though the fiscal deficit has risen because of the real growth in the economy.
1563	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus 1 per cent. The inflation rate is subdued at 2 per cent per annum. The outstanding public debt to GDP ratio was 100 per cent at the start of the year and the nominal interest rate remains at 2 per cent (and this is the rate the government pays on all outstanding debt). The government's fiscal balance net of interest payments goes into deficit during the year equivalent to 1 per cent of GDP and the public debt ratio rises by 4 per cent. In Year 2, the government stimulates the economy and pushes the primary fiscal deficit out to 4 per cent of GDP in recognition of the severity of the recession. In doing so it stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. The central bank holds the nominal interest rate constant but inflation falls to 1 per cent given the slack nature of the economy the previous year. Under these circumstances, the public debt ratio falls in Year 2, even though the fiscal deficit has risen because of the real growth in the economy.
593	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the budget deficit because of the real growth in the economy.
1298	In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The government's fiscal balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and pushes the primary fiscal deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the fiscal deficit because of the real growth in the economy.
1487	In Year 1, we observe a subdued inflation rate of 1 per cent per annum. At the start of the year, the outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The economy plunges into recession with nominal GDP growth falling by 1 per cent. As a result, the government's fiscal balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the public debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and doubles the primary fiscal deficit relative to GDP and, in doing so, stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the fiscal deficit because of the real growth in the economy.
104	Irrespective of the government's policy intention, it will always be in deficit if the non-government sector desires to save in the currency of issue and acts accordingly.
1861	Irrespective of what the government does, the private domestic sector can save overall, as long as the net exports are positive.
614	Irrespective of what the government does, the private domestic sector can save overall, as long as the net exports are positive.
1712	Irrespective of what the government does, the private domestic sector can still save overall, as long as the external sector delivers a surplus.
1467	Issuing government debt reduces the risk of inflation arising from deficit spending because the private sector has less money to spend.
1700	Issuing government debt reduces the risk of inflation arising from deficit spending because the private sector has less money to spend.
634	Issuing government debt reduces the risk of inflation arising from deficit spending because the private sector has less money to spend.
2129	Italy is currently in crisis but would have to undergo a period of austerity if it restored its currency and renegotiated all Euro debts into the New Lira (that is, defaulted) because investors would be reluctant to purchase Italian government debt.
1203	It has been argued that if the fiscal rules in the Eurozone were abandoned, and the automatic stabilisers in the Member-State fiscal positions were allowed to operate unfettered, then they would return the government fiscal balance to its appropriate level once growth returns following a downturn.
85	It is argued that the deleveraging of the Japanese private sector helped Japan avoid recession in the 1990s because the increased savings provided the finance for the huge budget deficits.
1539	It is claimed that Eurozone Member States need to rely on internal devaluation. Austerity programs thus aim to deflate nominal wages and prices in order to restore international competitiveness. Which of the following propositions must also follow according to this logic?
220	It is clear that an open market purchase by the central bank in the secondary bond markets gives the private sector more cash which means the monetary base expands if nothing else happens.
130	It is clear that as the population ages, we will reach some point when the non-government sector will begin to dis-save because individuals no longer have any need to accumulate assets for future consumption. This will mean the government will have to run surpluses as a matter of national accounting.
267	It is clear that EMU nations cannot use the exchange rate mechanism to adjust for trading imbalances arising from a lack of competitiveness within the Eurozone.  With fiscal and monetary policy tied by the EMU arrangements, the only adjustment mechanism left is to reduce wages and prices to restore competitiveness. While harsh this will ultimately improve the competitive position of Greece, Portugal, Ireland and other nations currently in external deficit.
349	It is clear that EMU nations cannot use the exchange rate mechanism to adjust for trading imbalances arising from a lack of competitiveness within the Eurozone. With fiscal and monetary policy tied by the EMU arrangements, the only adjustment mechanism left is to reduce wages and prices to restore competitiveness. While harsh this will ultimately improve the competitive position of Greece, Portugal, Ireland and other nations currently in external deficit.
2449	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, the presence of high inflation reduces the effectiveness of this strategy.
1149	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
1499	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
2252	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
2408	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
2423	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
2536	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
2549	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
465	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
990	It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
1000	It is common to use the term deleveraging to describe the reduction in indebtedness for a particular sector or group in the economy. In most nations at present, both the government and the private domestic sectors are carrying historically large debt ratios. However, under current public sector debt-issuance arrangements and given the national accounting relations, only one of these sectors can reduce its debt level at a time.
1154	It is common to use the term deleveraging to describe the reduction in indebtedness for a particular sector or group in the economy. In most nations at present, both the government and the private domestic sectors are carrying historically large debt ratios. However, under current public sector debt-issuance arrangements and given the national accounting relations, only one of these sectors can reduce its debt level at a time.
1210	It is easier for banks to expand credit to the private sector when bank reserves are rising.
132	It is important that households keep saving now to reduce their debt exposure and provide the funds for investment to get the economy moving again.
1985	It is impossible for a government to run a public surplus without impairing growth because it is likely that the private domestic sector will desire to save overall.
361	It is impossible for all national governments to simultaneously run public surpluses without impairing real economic growth because it is likely that the private domestic sector in some countries will desire to save overall.
38	It is inevitable that public debt will rise in Australia under current circumstances given
210	It is often argued that the central bank sets the short-run interest rates but the private market demand and supply sets the long-term interest rate. This is particularly important in the current debate that bond markets will close a government down if it senses the deficit is too large. However the reality is that the central bank can control interest rates at all yields by issuing debt at different maturities on a fixed yield basis. The only reason that private market forces have any influence is because the government voluntarily constrains itself to issue debt $-for-$ on an auction basis to match net spending.
61	It is reported that large international buyers of US Government treasury bonds are getting worried that the US deficit is getting too large. If they stop buying the bonds then
234	It is true that all official interest rates (which include the short-term policy target rate and all longer-maturity rates on government bonds) can be controlled by the central bank within the operational structure and tools at their disposable. However, the government doesn't pursue this option because they want higher interest rates to be set by the private capital markets so that they can dampen aggregate demand and avoid inflation.
1645	It might be argued that the strength of the German trade sector has kept the value of the euro at elevated levels against many of the key currencies and this has significantly reduced the international competitiveness of its higher per unit cost Eurozone partners. However, export competitiveness in those other Eurozone nations, such as Greece, would be increased if local workers accept cuts in nominal wages and their inflation rates are contained.
231	It will be appropriate for national governments around the world to withdraw their discretionary stimulus packages once their private sector spending recovers. Otherwise inflation will result.
2137	It won't be long before the European Commission demands that Eurozone nations are forced to pursue internal devaluation through austerity programs that are designed to deflate nominal wages and prices to allegedly improve their relative competitiveness. Ignoring whether the logic is correct or not, which of the following propositions must also follow within the internal devaluation logic
439	It would be impossible for a central bank to directly purchase treasury debt to facilitate the national governments budget deficit (that is, \monetise the deficit\) while still targeting a positive short-term policy rate.
374	It would be impossible for a central bank to directly purchase treasury debt to facilitate the national government's budget deficit while still targeting a positive short-term policy rate.
1556	It would be impossible for a central bank to directly purchase treasury debt to facilitate the national governments fiscal deficit (that is, \monetise the deficit\) while still targeting a positive short-term policy rate.
2028	It would be impossible for a central bank to directly purchase treasury debt to facilitate the national government's fiscal deficit while still targeting a positive short-term policy rate.
2276	It would be impossible for a government to avoid issuing debt to the non-government sector when running a fiscal deficit while the central bank was targeting a positive short-term policy rate.
950	It would be impossible for a government to avoid issuing debt to the private sector to match its budget deficit while the central bank was simultaneously targeting a positive short-term policy rate.
798	It would be impossible for a government to avoid issuing debt to the private sector when running a budget deficit while the central bank was targeting a positive short-term policy rate.
296	It would be impossible for the Reserve Bank of Australia to directly purchase Australian Treasury debt to facilitate the federal government's budget deficit while still targeting its policy rate of 4.5 per cent.
71	Japan was able to keep interest rates at zero for 15 or more years because
2358	Larger fiscal deficits as a percentage of GDP mean that there are less real resources available for other productive uses.
1886	Larger fiscal deficits as a percentage of GDP reduce the local productive resources that are available to the private domestic sector.
1459	Larger fiscal deficits as a percentage of GDP reduce the local productive resources that are available to the private sector.
2181	Larger fiscal deficits as a percentage of GDP reduce the local productive resources that are available to the private sector.
620	Larger fiscal deficits as a percentage of GDP reduce the local productive resources that are available to the private sector.
1540	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
1763	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
1978	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
2021	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
2337	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
2477	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
287	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
365	Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
174	Like anything in abundance, it is true that when there is more \money\ in the economy its value declines.
1973	Like anything in abundance, it is true that when there is more \money\ in the economy its value declines.
2009	Like anything in abundance, it is true that when there is more \money\ in the economy its value declines.
326	Like anything in abundance, it is true that when there is more \money\ in the economy its value declines.
1299	Like anything in abundance, the value of \money\ declines when their is more of it in the economy.
2412	Like anything in abundance, the value of the currency has to decline when there is more of circulating in the economy.
90	Luigi Pasinetti said that \investment brings forth its own saving\. This insight tells you that government deficits will never result in financial crowding out.
139	Mainstream economic theory adopts a government budget constraint framework to analyse the consequences of fiscal policy and predicts that budget deficits now result in higher taxes and interest rates in the future. Assume that framework was an accurate depiction of the monetary system. We would then also conclude that if you want low interest rates then surpluses are better and the relative size of government in the economy has to be smaller.
102	Mainstream economic theory considers output per unit of person employed (labour productivity) to be counter-cyclical (rises when activity falls and vice versa) - given they think the demand for labour is inversely related to the real wage. That is, they believe that when firms employ more workers productivity drops and so the real wage also have to fall to make it profitable. The real world observation that hours worked are adjusted before persons employed in response to changes in sales volumes means that output per unit of person employed is pro-cyclical which renders the main insights of orthodox labour demand theory inapplicable.
2471	Mainstream economists claim government deficits 'crowd out' private spending because deficits force interest rates up. Modern Monetary Theory (MMT) denies that crowding out can occur.
1860	Mainstream economists have argued that the large scale quantitative easing conducted by central banks in recent years - so-called printing money - would be inflationary. They based their predictions on the Classical Quantity Theory of Money which links the growth of the money stock to the inflation rate (too much money chasing too few goods). The fact that inflation has not accelerated sharply indicates that this mainstream economic theory should be discarded.
613	Mainstream economists have argued that the large scale quantitative easing conducted by central banks in recent years - so-called printing money - would be inflationary. They base their predictions on the Quantity Theory of Money which links the growth of the money stock to the inflation rate (too much money chasing too few goods). The fact that inflation has not accelerated sharply indicates that this mainstream economic theory should be discarded.
850	Mainstream economists have argued that the large scale quantitative easing conducted by central banks in recent years - so-called printing money - would be inflationary. They base their predictions on the Quantity Theory of Money which links the growth of the money stock to the inflation rate (too much money chasing too few goods). The fact that inflation is in retreat despite these programs does not refute the mainstream economic theory of inflation.
1524	Mainstream economists use the notion of \crowding out\ to argue that public spending squeezes out private spending and results in a less efficient allocation of resources overall. Modern Monetary Theory (MMT) accepts that crowding out can occur.
279	Mainstream economists use the notion of \crowding out\ to argue that public spending squeezes out private spending and results in a less efficient allocation of resources overall. Modern Monetary Theory (MMT) argues that the mainstream economists do not understand that the government only borrows what it has already spent. But MMT still recognise that crowding out can occur.
2331	Mainstream economists use the notion of 'crowding out' to argue that public spending squeezes out private spending and results in a less efficient allocation of resources overall. Modern Monetary Theory (MMT) denies that crowding out can occur.
1527	Mainstream economists use the notion of \crowding out\ to argue that public spending squeezes out private spending and results in a less efficient allocation of resources overall. Modern Monetary Theory (MMT) denies that crowding out can occur.
2020	Mainstream economists use the notion of \crowding out\ to argue that public spending squeezes out private spending and results in a less efficient allocation of resources overall. Modern Monetary Theory (MMT) denies that crowding out can occur.
360	Mainstream economists use the notion of \crowding out\ to argue that public spending squeezes out private spending and results in a less efficient allocation of resources overall. Modern Monetary Theory (MMT) denies that crowding out can occur.
2198	Mainstream monetary theory highlights the concept of a money multiplier which says that the money supply is some multiple of the monetary base (bank reserves and currency). There is a direct relationship between the monetary base and the broad money supply in a modern monetary economy.
653	Mainstream monetary theory highlights the concept of a money multiplier which says that the money supply is some multiple of the monetary base (bank reserves and currency). There is a direct relationship between the monetary base and the the money supply in a modern monetary economy.
152	Maintaining a peg against another currency means that monetary policy and fiscal policy work against each other.
543	Many countries are facing higher public debt to GDP ratios as a consequence of the crisis and some are approaching 100 per cent. Assume the current public debt to GDP ratio is 100 per cent and that central banks keep nominal interest rates and inflation constant and zero. The proponents of fiscal austerity say that by running primary surpluses they can reduce the public debt to GDP ratio even if they create a short-term recession and invoke the automatic stabilisers (which push the budget towards deficit). However, they also claim that it is likely that their strategy will promote growth. The austerity strategy cannot reduce the debt ratio (under our assumptions) if a recession results.
445	Many countries are facing higher public debt to GDP ratios as a consequence of the crisis and some are approaching 100 per cent. Assume the current public debt to GDP ratio is 100 per cent and that central banks keep nominal interest rates and inflation constant and zero. While fiscal austerity is likely to prolong the recession, it is still possible to reduce the public debt to GDP ratio (under these circumstances), if the primary budget surplus to GDP ratio is higher than the negative GDP growth rate that results.
1476	Many progressive commentators believe that bank lending should be more closely regulated to ensure that all bank loans were backed by reserves held at the bank. However, this would unnecessarily reduce the capacity of the banks to lend.
1162	Many progressive observers are demanding that bank lending should be more closely regulated to ensure that all bank loans were backed by reserves held at the bank. However, this would unnecessarily reduce the capacity of the banks to lend.
1851	Matching government deficit spending with bond issues is less expansionary than if the government instructed the central bank to buy its bonds to match the deficit.
2298	Matching government deficit spending with bond issues is less expansionary than if the government instructed the central bank to buy its bonds to match the deficit.
581	Matching government deficit spending with bond issues is less expansionary than if the government instructed the central bank to buy its bonds to match the deficit.
2373	MMT recognises that increasing the amount of money in the economy will reduce its value.
1558	Modern Monetary Theory accepts that continually expanding the money supply will inevitably be inflationary.
1263	Modern Monetary Theory accepts the proposition that if the central bank continually expands the monetary base then there will inevitably be an accelerating inflation.
2214	Modern Monetary Theory accepts the proposition that if the central bank continually expands the monetary base then there will inevitably be an accelerating inflation.
793	Modern Monetary Theory challenges the notion of the money multiplier but still accepts that continually expanding the money supply will inevitably be inflationary.
914	Modern Monetary Theory does not accept the mainstream macroeconomics proposition that continually expanding the money supply will be inflationary.
2115	Modern Monetary Theory implies that higher levels of taxation are not necessary for the government to spend more in real terms.
507	Modern Monetary Theory implies that higher levels of taxation are not necessary for the government to spend more in real terms.
1815	Modern Monetary Theory (MMT) allows for the possibility that trade union power can cause mass unemployment.
1336	Modern Monetary Theory (MMT) brings an understanding of the way central banks purchase and sell government bonds to manage liquidity in the overnight cash markets and thus sustain their target rate of interest. MMT also leads to the conclusion that a central bank could still increase interest rates even if a currency-issuing government instructed it to directly purchase treasury debt to facilitate the national governments fiscal deficit.
834	Modern Monetary Theory (MMT) brings an understanding of the way central banks purchase and sell government bonds to manage liquidity in the overnight cash markets and thus sustain their target rate of interest. MMT also leads to the conclusion that a central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national governments budget deficit.
1684	Modern Monetary Theory (MMT) brings an understanding of the way central banks purchase and sell government bonds to manage liquidity in the overnight cash markets and thus sustain their target rate of interest. MMT also leads to the conclusion that a central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to match the national governments fiscal deficit.
1628	Modern Monetary Theory (MMT) characterises the interaction between the government sector (treasury and central bank) and the non-government sector in terms of vertical transactions, which change the net financial asset position of the non-government sector. These are in contrast with transactions within the non-government sector, which net to zero in terms of the impact on that sector's net financial asset position. Both quantitative easing (a central bank operation) and net public spending (a treasury operation) satisfy this definition of a vertical transaction.
941	Modern Monetary Theory (MMT) characterises the interaction between the government sector (treasury and central bank) and the non-government sector in terms of vertical transactions, which change the net financial asset position of the non-government sector. These are in contrast with transactions within the non-government sector, which net to zero in terms of the impact on the financial asset position. Both quantitative easing (a central bank operation) and net public spending (a treasury operation) fit this depiction of vertical transactions.
1604	Modern Monetary Theory (MMT) concurs that excessive real wages growth can cause unemployment.
1884	Modern Monetary Theory (MMT) considers that the public debt ratio is of no concern because economic growth will always bring it down after a recession.
890	Modern Monetary Theory (MMT) considers that the public debt ratio is of no concern because economic growth will always bring it down after a recession.
1063	Modern Monetary Theory (MMT) consider the transactions conducted by the government sector (treasury and central bank) with the non-government sector to be vertical transactions, which change the net financial asset position of the non-government sector. However, quantitative easing (a central bank transaction) is not considered to be a vertical transaction.
1025	Modern Monetary Theory (MMT) demonstrates that a currency-issuing government has no intrinsic financial constraint and any constraints that are observed in practice reflect voluntary decisions by government to restrict their options. It remains, however, that the inflation risk associated with government spending would be higher if such a government stopped issuing public debt to match its deficit spending.
885	Modern Monetary Theory (MMT) demonstrates that a currency-issuing government has no intrinsic financial constraint and any constraints that are observed in practice reflect voluntary decisions by government to restrict their options. It remains, however, that the inflation risk associated with government spending would be higher if such a government stopped issuing public debt to match its deficit spending.
2069	Modern Monetary Theory (MMT) demonstrates that excessive real wages can cause unemployment.
879	Modern Monetary Theory (MMT) demonstrates that mass unemployment arises from deficient aggregate demand which calls for an increase in the budget deficit to correct the deficiency. This observation is at odds with a policy prescription which aims to cut real wages relative to productivity.
648	Modern Monetary Theory (MMT) demonstrates that mass unemployment arises from deficient aggregate demand which calls for an increase in the budget deficit to correct the deficiency. This observation is totally at odds with the mainstream view that unemployment can be reduced by cutting real wages relative to productivity.
1971	Modern Monetary Theory (MMT) demonstrates that mass unemployment arises from deficient aggregate demand which calls for an increase in the fiscal deficit to correct the deficiency. This observation is totally at odds with the mainstream view that unemployment can be reduced by cutting real wages relative to productivity.
2195	Modern Monetary Theory (MMT) demonstrates that mass unemployment arises from deficient aggregate demand which calls for an increase in the fiscal deficit to correct the deficiency. This observation is totally at odds with the mainstream view that unemployment can be reduced by cutting real wages relative to productivity.
447	Modern Monetary Theory (MMT) demonstrates that mass unemployment can arise from workers demanding nominal wage growth in excess of inflation. That is, excessive real wages can cause unemployment.
1584	Modern Monetary Theory (MMT) demonstrates that mass unemployment can arise from workers demanding too high a nominal wage in relation to the inflation rate.
385	Modern Monetary Theory (MMT) demonstrates that mass unemployment can arise from workers demanding too high a nominal wage in relation to the inflation rate.
2380	Modern Monetary Theory (MMT) denies that the stock of aggregate spending can exceed the capacity of the productive sector and cause inflation.
863	Modern Monetary Theory (MMT) does not deny that government spending can crowd out private spending.
1619	Modern Monetary Theory (MMT) does not reject the claim that government spending can crowd out private spending.
1118	Modern Monetary Theory (MMT) explains how central banks sell bonds to drain excess bank reserves in order to maintain their given interest rate setting. We know that the same outcome can be achieved by paying interest to the commercial banks on the same reserves. Ignoring any reserve requirements, this means that there is no need for government (via the central bank) to issue debt when it net spends.
676	Modern Monetary Theory (MMT) explains how central banks sell bonds to drain excess bank reserves in order to maintain their given interest rate setting. We know that the same outcome can be achieved by paying interest to the commercial banks on the same reserves. Ignoring any reserve requirements, this means that there is no need for government (via the central bank) to issue debt when it net spends.
1393	Modern Monetary Theory (MMT) explains how central banks sell bonds to drain excess bank reserves in order to maintain their given interest rate setting. We know that the same outcome can be achieved by paying interest to the commercial banks on the same reserves. Ignoring any reserve requirements, this means that there is no need for the central bank to sell debt when the government net spends.
1036	Modern Monetary Theory (MMT) indicates that a nation can fall into mass unemployment if real wages growth is rapid.
752	Modern Monetary Theory (MMT) is consistent with the claim that government spending can crowd out private spending.
1064	Modern Monetary Theory (MMT) leads to the conclusion that a central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national governments budget deficit rather than the treasury selling the debt into the private bond market
944	Modern Monetary Theory (MMT) leads to the conclusion that a central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national governments budget deficit rather than the treasury selling the debt into the private bond market.
1094	Modern Monetary Theory (MMT) makes a crucial distinction between the issuer of the currency and the user of that currency. Unlike a household, which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
1916	Modern Monetary Theory (MMT) makes a crucial distinction between the issuer of the currency and the user of that currency. Unlike a household, which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
957	Modern Monetary Theory (MMT) makes a crucial distinction between the issuer of the currency and the user of that currency. We learn that unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
1085	Modern Monetary Theory (MMT) observes that the private sector is wealthier if a currency-issuing government matches its deficit spending with bond issues relative to a situation where the government maintained the same size deficits without issuing bonds to the private sector.
960	Modern Monetary Theory (MMT) recognises that political constraints that governments operate within often override the intrinsic capacities they have as currency issuers. Accordingly, it recognises there is a trade-off between the need to run budget surpluses to reduce the public debt ratio and the political problems that austerity brings.
1864	Modern Monetary Theory (MMT) recognises that the unemployed live of the hard work of those that are employed.
866	Modern Monetary Theory (MMT) recognises that the unemployed live of the hard work of those that are employed.
1573	Modern Monetary Theory (MMT) recognises the potential problem with running continuous fiscal deficits is that the spending builds up over time which adds to inflationary pressures.
2160	Modern Monetary Theory (MMT) refutes the claim that government spending can crowd out private spending.
535	Modern Monetary Theory (MMT) refutes the claim that government spending can crowd out private spending.
1186	Modern Monetary Theory (MMT) shows that a sovereign national government, that is, one that issues its own floating currency faces no solvency risk with respect to the debt it issues.
1272	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
1623	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
2118	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
2220	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
516	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
978	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues
1079	Modern Monetary Theory (MMT) teaches us that a sovereign government does not have to issue debt to finance its spending. But the more public debt it voluntarily issues the greater is non-government wealth held in the form of public debt.
1694	Modern Monetary Theory (MMT) teaches us that one of the dangers of public spending is that it can crowd out private spending.
1181	Modern Monetary Theory (MMT) tells us that while a currency-issuing government running a deficit can never reduce the public debt to GDP ratio the rising ratio is of no concern because such a government faces no risk of insolvency.
1073	Modern Monetary Theory rejects the notion of the money multiplier but still accepts that continually expanding the money supply will inevitably be inflationary.
1847	Modern Monetary Theory shows that governments do not have to issue debt to match their deficit spending. However, byissuing debt, the wealth of the non-government sector immediately increases, which would not happen if the central bank just credited bank accounts on behalf of the treasury without the debt matching.
1834	Modern Monetary Theory teaches us that one of the dangers of public deficits is that they can crowd out private spending.
1238	Modern Monetary Theory teaches us that one of the dangers of public spending is that it can crowd out private spending.
846	Modern Monetary Theory teaches us that one of the dangers of public spending is that it can crowd out private spending.
1350	Modern Monetary Theory tells us that a sovereign national government can run deficits without issuing debt. But the debt issuance allows the government to drain demand (private spending capacity) so that the public spending has more non-inflationary room to work within.
2014	Modern Monetary Theory tells us that a sovereign national government can run deficits without issuing debt. But the debt issuance allows the government to drain demand (private spending capacity) so that the public spending has more non-inflationary room to work within.
529	Modern Monetary Theory tells us that a sovereign national government can run deficits without issuing debt. But the debt issuance allows the government to drain demand (private spending capacity) so that the public spending has more non-inflationary room to work within.
153	Modern monetary theory tells us that expansionary fiscal policy in an emerging economy can always improve living standards.
173	Modern monetary theory tells us that the larger is the fiscal deficit the less real resources that will be available for other productive uses.
145	Modern monetary theory tells us that while asset bubbles that drive private sector debt beyond sustainable levels are disruptive, there should be no reason for GDP and employment growth to turn negative.
188	Modern monetary theory which is recognises the sovereignty of the national government in its own currency, considers that the government risks losing this sovereignty if it borrows from foreign governments.
229	Monetary policy is of some importance because interest rates changes are the way in which saving (rising when interest rates rise) and investment (falling when interest rates rise) adjust to ensure that aggregate demand doesn't decline when the non-government sector tries to increase its saving ratio and consumption falls. The problem is that central banks haven't adequately allowed the rates to adjust enough because they have been targetting inflation.
1497	Money is often considered to be currency plus demand deposits. If there is more money in the economy its value always declines.
461	Money is often considered to be currency plus demand deposits. If there is more money in the economy its value declines.
830	Most major political parties around the world support the imposition of austerity budgets on their economies. The major difference is that so-called \progressives\ prefer tax rises rather than spending cuts whereas so-called \conservatives\ recommend spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
263	My statement that the British government could do its citizens a favour by assuming absolute power and suspending the national election for three years.
2543	n a fiat monetary system (for example, US or Australia) with an on-going external deficit and fiscal deficit that is smaller than the external sector, then the domestic private sector is in
1117	Nation A is running a small current account deficit and its private domestic sector is saving overall. Nation B has a smaller external deficit (relative to its GDP) but its private domestic sector is balancing its spending and income. The governments in both Nations have to be running deficits.
2223	Nation A is running a small current account deficit and its private domestic sector is saving overall. Nation B has a smaller external deficit (relative to its GDP) but its private domestic sector is balancing its spending and income. The governments in both Nations have to be running deficits.
1368	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a budget surplus through an austerity program then the private domestic sector must be spending more than it is earning.
800	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a budget surplus through an austerity program then the private domestic sector must be spending more than it is earning.
916	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a budget surplus through an austerity program then the private domestic sector must be spending more than it is earning.
1416	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a fiscal surplus through an austerity program then the private domestic sector must be spending more than it is earning.
1643	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a fiscal surplus through an austerity program then the private domestic sector must be spending more than it is earning.
1876	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a fiscal surplus through an austerity program then the private domestic sector must be spending more than it is earning.
2278	National accounting rules dictate that a national government surplus equals a non-government deficit (and vice-versa). If a national government successfully achieves a fiscalsurplus through an austerity program then the private domestic sector must therefore be spending more than it is earning.
847	National accounting shows us that a government surplus equals a non-government deficit. But that doesn't mean that if fiscal austerity ends up generating a budget surpluses that households and firms will be running deficits.
1239	National accounting shows us that a government surplus equals a non-government deficit. But that doesn't mean that if fiscal austerity ends up generating a fiscal surpluses that households and firms taken together will be running deficits.
1695	National accounting shows us that a government surplus equals a non-government deficit. But that doesn't mean that if fiscal austerity ends up generating a fiscal surpluses that households and firms will be running deficits.
1835	National accounting shows us that a government surplus equals a non-government deficit. But that doesn't mean that if fiscal austerity ends up generating a fiscal surplus that households and firms will be running deficits.
1268	National accounting shows us that a government surplus equals a non-government deficit. If a government is successful in achieving a fiscal surplus then the private domestic sector will become more indebted as a consequence which means that austerity amounts to swapping public for private debt.
2219	National accounting shows us that a government surplus equals a non-government deficit. If a government is successful in achieving a fiscal surplus then the private domestic sector will ultimately become more indebted as a consequence, which means that austerity amounts to swapping public for private debt.
605	National accounting shows us that a government surplus equals a non-government deficit. If fiscal austerity does generate budget surpluses it does so by swapping public for private debt.
1703	National accounting shows us that a government surplus equals a non-government deficit. If fiscal austerity does generate fiscal surpluses it does so by swapping public for private debt.
2175	National accounting shows us that a government surplus equals a non-government deficit. If fiscal austerity does generate fiscal surpluses it does so by swapping public for private debt.
554	National accounting shows us that a government surplus equals a non-government deficit. If the British government is successful in putting its budget back into surplus then the private domestic sector will become more indebted as a consequence which means that austerity amounts to swapping public for private debt.
962	National accounting shows us that a government surplus equals a non-government deficit. If the nation has an external deficit and if fiscal austerity ends up generating a budget surpluses, then the collective indebtedness of households and firms must be rising.
1012	National accounting shows us that a government surplus equals a non-government deficit. So if the imposition of fiscal austerity ends up generating a budget surpluses then the national income movements will force households and firms overall to be running deficits.
1437	National accounting shows us that a government surplus equals a non-government deficit. So if the imposition of fiscal austerity ends up generating a budget surpluses then the national income movements will force households and firms overall to be running deficits.
2490	National government debt (where there is currency sovereignty) is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debt but also has to repay them at the due date.
652	National government taxation creates unemployment, other things equal.
853	National income would rise each year even if the workers, as part of a employment guarantee program, were engaged to dig large holes and fill them in again on a daily basis.
1697	National income would rise each year even if the workers were engaged by government to dig large holes and fill them in again on a daily basis.
972	Nations that run large external surpluses can usually maintain economic growth and satisfy the desire of the private domestic sector to save overall while running budget surpluses. By accumulating those budget surpluses in a sovereign fund, the government can create more space for non-inflationary spending in the future once the resource wealth dissipates and the external sector moves into deficit.
1093	Nations with external deficits operate within the constraint that national income movements in response to aggregate spending will ensure that the two remaining sectors (government and private domestic) will spend more than they receive, irrespective of the GDP growth rate.
1915	Nations with external deficits operate within the constraint that national income movements will ensure that the two remaining sectors (government and private domestic) will spend more than they receive, irrespective of the GDP growth rate.
475	Non-government sector net worth does not change when the government issues debt which exactly matches ($-for-$) the increase in net public spending.
2158	Non-government sector net worth does not immediately change when the government issues debt which exactly matches ($-for-$) the increase in net public spending.
1076	Norway has accumulated one of the largest sovereign funds as a result of its North Sea energy endowments, which have allowed it to maintain high standards of living and still run budget surpluses. Once the resource wealth dissipates and Norway's external sector moves into deficit, the sovereign fund accumulation will have created more space for non-inflationary spending.
22	Norway has a lower unemployment rate than Australia
696	OECD estimates of structural budget deficits will usually lead one to conclude that a government's discretionary fiscal position is less expansionary than it actually is.
1024	One advantage of low inflation is that the central bank can better use balance sheet management techniques to control yields on public debt at certain targetted maturities.
1389	One advantage of low inflation is that the central bank can better use balance sheet management techniques to control yields on public debt at certain targetted maturities.
1869	One advantage of low inflation is that the central bank can better use balance sheet management techniques to control yields on public debt at certain targetted maturities.
884	One advantage of low inflation is that the central bank can better use balance sheet management techniques to control yields on public debt at certain targetted maturities.
2224	One consequence (perhaps an advantage) of the government issuing bonds to the non-government sector to match its deficit over the alternative of not issuing any new debt, is that the non-government sector is immediately wealthier as a consequence.
2144	One important lesson to be drawn from Modern Monetary Theory (MMT), which is overlooked in the current pandemic, is that when economic growth resumes, the automatic stabilisers work will ensure that the government fiscal balance returns to its appropriate level.
297	One important lesson to be drawn from Modern Monetary Theory (MMT), which is overlooked in the public call for austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government budget balance returns to its appropriate level.
1329	One important lesson to be drawn from Modern Monetary Theory (MMT), which is overlooked in the public call for austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government fiscal balance returns to its appropriate level.
1538	One important lesson to be drawn from Modern Monetary Theory (MMT), which is overlooked in the public call for austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government fiscal balance returns to its appropriate level.
1819	One interpretation of the sectoral balances decomposition of the national accounts, is that it is impossible for all governments (in all nations) to run public surpluses without impairing growth because it is likely that the private domestic sector in some countries will desire to save overall.
280	One interpretation of the sectoral balances decomposition of the national accounts, is that it is impossible for all governments (in all nations) to run public surpluses without impairing growth because it is likely that the private domestic sector in some countries will desire to save overall.
1217	One of the few advantages of a currency-issuing government issuing bonds to match its deficit spending is that it boosts private sector wealth.
235	One of the problems facing the Eurozone is that Greece, Ireland and Spain enjoyed rapid growth and allowed their real wage levels to rise faster than labour productivity. They thus lost competitiveness to Germany which contained real wages growth by a program of deregulation. Given that the member countries could not rely on depreciation of their exchange rate to offset this competitive loss their domestic wage adjustment now has to be more painful.
303	One of the reasons, mainstream economists argue for lower taxes is that they believe they distort the allocation of resources by changing the rates of return on different uses of capital (and labour). In the 2010-11 Australian Federal Budget, the Australian government introduced a Resource Super Profits Tax on mining companies as a way of sharing the gains made from excess mining profits across all Australians. Leaving aside the arguments that the government does not need revenue to spend, a typical mainstream economist would conclude that this tax will reduce mining investment.
749	One of the reasons that motivate a government to issue debt and introduce rules that prevent their central banks from directly \funding\ deficit spending is because such practices reduces the inflation risk of such spending by draining demand capacity from the private sector.
1345	One possible problem with running continuous budget deficits is that the spending builds up over time and with inflation eventually becoming the risk that has to be managed.
302	One possible problem with running continuous budget deficits is that the spending builds up over time and with inflation eventually becoming the risk that has to be managed.
378	One possible problem with running continuous budget deficits is that the spending builds up over time and with inflation eventually becoming the risk that has to be managed.
2138	One possible problem with running continuous fiscal deficits is that the spending builds up over time and with inflation eventually becoming the risk that has to be managed.
723	One reason to favour the continued issuing of government debt when the government runs a deficit is that it increases the net worth of the non-government sector.
1811	Only one of the following combinations is possible for a nation (balances expressed as a proportion of GDP)
1132	Only one of the following propositions is possible for a nation over any given period (with all balances expressed as a per cent of GDP)
2229	Only one of the following propositions is possible for a nation over any given period (with all balances expressed as a per cent of GDP)
2400	Only one of the following propositions is possible for a nation with an external deficit over any given period (with all balances expressed as a per cent of GDP)
2528	Only one of the following propositions is possible for a nation with an external deficit over any given period (with all balances expressed as a per cent of GDP):\n\n\nA public surplus of equal size to the external deficit, with the private domestic sector dis-saving overall.\nA public surplus larger than the external deficit, with the private domestic sector saving overall
1344	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
1391	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
1882	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
1970	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
2136	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
2362	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
2502	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
299	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
379	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
522	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
746	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
974	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP)
1035	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP).
887	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP).
1626	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP) - a nation can run a current account deficit
1275	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP) - a nation can run a current account deficit accompanied by a government sector surplus
1046	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP). A nation can run a current account deficit accompanied by a government sector surplus
1756	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP). A nation can run a current account deficit accompanied by a government sector surplus
697	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP). A nation can run a current account deficit accompanied by a government sector surplus
1304	Only one of the following propositions is possible (with all balances expressed as a per cent of GDP):\n<ul>\n<li>A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.</li>\n<li>A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.</li>\n<li>A nation can run a current account deficit with a government sector surplus that is larger, while the private domestic sector is spending less than they are earning.</li>\n<li>None of the above are possible as they all defy the sectoral balances accounting identity.</li>\n</ul>
1896	Only one of the following statements can be true when you observe rising government bond yields for new issues
2037	Only one of the following statements can be true when you observe rising government bond yields for new issues
2366	Only one of the following statements can be true when you observe rising government bond yields for new issues
2506	Only one of the following statements can be true when you observe rising government bond yields for new issues
390	Only one of the following statements can be true when you observe rising government bond yields for new issues
1607	Only one of the following statements is definitely true when you observe rising government bond yields for new issues
2073	Only one of the following statements is definitely true when you observe rising government bond yields for new issues
2327	Only one of the following statements is definitely true when you observe rising government bond yields for new issues
2467	Only one of the following statements is definitely true when you observe rising government bond yields for new issues
454	Only one of the following statements is definitely true when you observe rising government bond yields for new issues
1502	On the day that the government issues debt to match ($-for-$) the increase in its deficit, non-government sector net worth increases.
1295	Open market operations as a means of ensuring that levels of bank reserves are consistent with the monetary policy target become redundant whenever the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
1608	Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy interest rate target becomes redundant if the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
2088	Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy target become redundant if the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
910	Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy target become redundant if the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
779	Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy target become redundant whenever the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
455	Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy target becomes redundant if the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
215	Open market operations (buying and selling bonds in the secondary markets) allow the central market to control the money supply because a sale of bonds will be exchanged with the non-government sector for money and vice versa in the case of a central bank purchase of bonds. These are examples of vertical transactions in modern monetary theory.
845	Opponents of continuous budget deficits often agree that a short-period of deficit spending when the private demand is weak is not likely to be inflationary. Their main concern is that it is the accumulated stock of spending associated with continuous budget deficits that eventually increases the risk of inflation. Their concern has validity.
970	Opponents of continuous budget deficits often agree that a short-period of deficit spending when the private demand is weak is not likely to be inflationary. Their main concern is that it is the accumulated stock of spending associated with continuous budget deficits that eventually increases the risk of inflation. Their concern has validity because if nominal spending growth outstrips the capacity of the economy to respond in real terms, then inflation will be the result.
1768	Opponents of continuous fiscal deficits often agree that a short-period of deficit spending when the private demand is weak is not likely to be inflationary. Their main concern is that it is the accumulated stock of spending associated with continuous fiscal deficits that eventually increases the risk of inflation. Their concern has some validity.
1421	Opponents of continuous fiscal deficits often agree that short-period of deficit spending is not likely to be inflationary when the private demand is weak. Their main concern is that the accumulated stock of spending associated with continuous fiscal deficits eventually increases the risk of inflation. Their concern has validity.
2071	Organisations such as the IMF and the OECD and many central banks use the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to estimate full capacity, which then allows them to calibrate their structural deficit estimates, which indicate the discretionary fiscal stance of the government in question. Accordingly, the structural deficits will typically be
2066	Other things equal, larger fiscal deficits as a percentage of GDP squeeze the availability of real resources that the private sector can use for other productive uses.
434	Other things equal, larger fiscal deficits as a percentage of GDP squeeze the availability of real resources that the private sector can use for other productive uses.
1235	Over a given business cycle (peak to peak), if a nation's external sector is on average balanced and the government gap between its tax revenue and spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in
901	Over a given business cycle (peak to peak), if a nation's external sector is on average balanced and the government gap between its tax revenue and spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in
1837	Over a given economic cycle (peak to peak), if a nation's external sector is on average balanced and the government gap between its tax revenue and spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in
2349	Over a given economic cycle (peak to peak), if a nation's external sector is on average balanced and the government gap between its tax revenue and spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in
2492	Over a given economic cycle (peak to peak), if a nation's external sector is on average balanced and the government gap between its tax revenue and spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in
1888	Over a given economic cycle (peak to peak), if a nation's external sector is, on average, balanced and the government gap between its tax revenue and spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will, on average, be in
1317	Over a given economic cycle (peak to peak), if a nation's external sector is on average balanced and the government surplus of tax revenue over its spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in
2364	Over the last several decades, central banks and treasuries have used the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to define full employment and calibrate their estimates of the state of the economic cycle. Accordingly, these estimates will typically be
2504	Over the last several decades, central banks and treasuries have used the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to define full employment and calibrate their estimates of the state of the economic cycle. Accordingly, these estimates will typically be
2352	Over the last several decades, governments have introduced punitive measures against the unemployed and exploited the popular view, that the unemployed on income support benefits live off the hard work of those who pay taxes. The popular view has validity.
959	Over the last two decades, there have been major redistributions of national income towards profits in many nations. This has arisen because inflation has run faster than the growth in nominal wages leading to larger profit margins.
1800	Over the last two decades, there have been major redistributions of national income towards profits in many nations. This has occurred as a result of the suppression of real wages growth.
839	Over the last two decades, there have been major redistributions of national income towards profits in many nations. This has occurred as a result of the suppression of real wages growth.
2295	Over the last two decades, there have been major redistributions of national income towards profits in many nations. This has occurred because of the suppression of real wages growth.
1090	People are richer if the government issues bonds to match its net deficit spending relative to a situation where the government just instructed the central bank to ensure all spending cleared the payments system.
1452	People are richer they purchase bonds that the government issues to match its net deficit spending relative to a situation where the government just instructed the central bank to ensure all public spending cleared the payments system.
2173	Politics aside, the central bank can still increase interest rates even if it was legislatively required to directly purchase treasury debt to match the national governments fiscal deficit.
601	Politics aside, the US central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national governments budget deficit.
1750	Politics aside, the US central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national governments fiscal deficit.
1841	Politics aside, the US central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national governments fiscal deficit.
118	Prior to the Great Depression, economists believed that saving was required to provide the funds for investment and that the interest rate would regulate the relationship between the two. Keynes showed that investment created its own saving through income adjustments rather than interest rate adjustments.
1214	Private households, in aggregate, cannot save if a nation's external sector is in balance (and thus making no contribution to real GDP growth) and the government runs a balanced budget.
1306	Private sector wealth is invariant to the decision by government to issue bonds to the non-government sector to match its deficit spending as against not issuing any bonds.
786	Private sector wealth is invariant to the decision by government to issues bonds to match its deficit spending as against not issuing any bonds.
1740	Progressives have pointed out the slow or non-existent growth in real wages over the last decades. What they demand is that the rate of growth in earnings is faster than the growth in labour productivity. Is this sufficient to achieve their aim of real wages growth?
595	Public bonds constitute private wealth. Accordingly, private net worth rises if the government issues bonds to match its deficit spending.
1753	Public spending can \crowd out\ private spending.
2177	Public spending can \crowd out\ private spending.
607	Public spending can \crowd out\ private spending.
1	Quantitative easing
832	Quantitative easing aims to stimulate aggregate demand by reducing long-term investment rates whereas deficit spending aims to stimulate aggregate demand via tax cuts or direct public spending. Both policies ultimately work by increasing the net financial assets held by the non-government sector.
1337	Quantitative easing aims to stimulate aggregate demand by reducing long-term investment rates whereas deficit spending aims to stimulate aggregate demand via tax cuts or direct public spending. Both policies ultimately work by increasing the net financial assets held by the non-government sector even if QE is less (even largely) ineffective.
1682	Quantitative easing aims to stimulate aggregate spending by reducing long-term investment rates whereas deficit spending aims to stimulate aggregate spending via tax cuts or direct public spending. Both policies ultimately work by increasing the net financial assets held by the non-government sector.
1994	Quantitative easing aims to stimulate aggregate spending by reducing long-term investment rates whereas fiscal deficit stimulate aggregate spending via tax cuts or direct public spending. Both policies ultimately work by increasing the net financial assets held by the non-government sector.
1493	Quantitative easing and an expansion of net public spending both add net financial assets to the non-government sector but the former aims to stimulate demand by lowering interest rates while the latter policy choice directly adds spending to the economy.
1157	Quantitative easing and an expansion of net public spending both add net financial assets to the non-government sector but the former aims to stimulate demand by lowering interest rates while the latter policy choice more directly adds demand to the system.
2102	Quantitative easing and an expansion of net public spending both add net financial assets to the non-government sector but the former aims to stimulate demand by lowering interest rates while the latter policy choice more directly adds demand to the system.
2260	Quantitative easing and an expansion of net public spending both add net financial assets to the non-government sector but the former aims to stimulate demand by lowering interest rates while the latter policy choice more directly adds demand to the system.
513	Quantitative easing and an expansion of net public spending both add net financial assets to the non-government sector but the former aims to stimulate demand by lowering interest rates while the latter policy choice more directly adds demand to the system.
196	Quantitative easing involves buying one type of financial asset (private bonds holdings) in exchange for another (reserve balances) with no change in net financial assets in the private sector. This may be inflationary, however, if the increased demand for long maturity assets held in the private sector reduces long-term interest rates and the demand for loans increases.
226	Quantitative easing of the type the Bank of England is currently engaged in cannot be compared to a net fiscal injection because it creates no new net financial assets in the currency of issue.
600	Quantitative easing tries to stimulate economic activity by reducing long-term investment rates whereas deficit spending adds to aggregate demand via tax cuts or direct public spending. Both expansionary efforts involve an increase in the net financial assets held by the non-government sector.
1749	Quantitative easing tries to stimulate economic activity by reducing long-term investment rates whereas deficit spending adds to aggregate demand via tax cuts or direct public spending. Both policy effort add reserves to the banking system in different ways and involve an increase in the net financial assets held by the non-government sector.
421	Quite apart from whether they understand that they do not face any financial constraints, governments are now trying to reduce their budget deficits because they correctly understand that additional fiscal stimulus would increase the public debt ratios which would worsen their political positions.
1578	Raising taxation revenue is an essential element in a sovereign government's plan to implement and provision its socio-economic agenda.
1262	Real government spending can be higher if the government can raise more tax revenue by increasing tax rates.
2213	Real government spending can be higher if the government can raise more tax revenue by increasing tax rates.
547	Real government spending can be higher if they raise more tax revenue.
105	Real unit labour costs (RULC) are measured by dividing the real wage by output per unit of employment (labour productivity) and tell us how much in labour terms each unit of output cost to produce. RULC always rise when employment falls which is a good empirical indicator that real wages are too high.
1696	Real wage cuts under austerity programs could increase the wage share.
2203	Real wage increases require the rate of growth in earnings to be faster than labour productivity growth.
1296	Real wages are falling in many economies as a result of austerity measures because the rate of growth in earnings has fallen behind the growth in labour productivity.
1852	Real wages growth has been non-existent or low in many advanced nations in recent years. However, if workers succeed in gaining real wages increases then this will squeeze the share of profits in national income.
741	Real wages increases require the rate of growth in nominal earnings to outstrip the growth in labour productivity.
831	Real wages in Greece rose during the Euro period leading up to the crisis because the rate of growth in earnings outstripped its low labour productivity growth.
656	Real wages will rise if the rate of growth in earnings is faster than the growth in labour productivity.
893	Real wages will rise if the rate of growth in nominal earnings outstrips the growth in labour productivity (output per unit of labour input).
1193	Recent press reports indicate that the European Central Bank is considering introducing quantitative easing to ease the aggregate demand losses associated with the implementation of fiscal austerity programs as deflation threatens. If calibrated correctly, this strategy will replace the net financial assets destroyed by the fiscal austerity.
577	Recipients of income support provided by the national government are living off the hard work of those who pay income taxes.
1271	Rising 10-year government bond yields tell us that private bond markets are demanding increased risk coverage for these assets.
2110	. Rising government bond yields for new issues indicate
1504	Rising government bond yields for new issues indicate
313	Rising government bond yields for new issues indicate
492	Rising government bond yields for new issues indicate
79	Rising government bond yields for new issues indicate
1714	Rising government deficits indicate that its fiscal stance is becoming more expansionary.
617	Rising government net spending (budget deficit) indicates that the government fiscal stance is becoming more expansionary.
67	Rising long-term bond yields are evidence that
1484	Rising private domestic saving overall signals the need for an expanding public deficit to avoid employment losses.
562	Rising private domestic saving overall signals the need for an expanding public deficit to avoid employment losses.
387	Rising public debt levels at constant interest rates increase the volume of interest servicing payments that have to be made. For a sovereign nation entrenched in recession, these payments will
452	Rising public debt levels at constant interest rates increase the volume of interest servicing payments that have to be made. For a sovereign nation entrenched in recession, these payments will
310	Rising public debt levels at constant interest rates increase the volume of interest servicing payments that have to be made. These payments will
1669	Rising yields on 10-year bond yields rising signify that the bond markets are demanding increased risk premiums for these assets.
88	Rising yields on government bonds will accompany a falling demand for the bonds relative to their supply into the bond markets.
249	Russia was forced to default on its outstanding public debt because it faced a major collapse of oil prices in world markets which meant it could no longer raise the foreign currency necessary to repay the loans via net exports. But the defaults were ultimately due to the currency peg against the US dollar that they voluntarily put in place.
143	Samuel Brittain wrote \If we dont, it wont and wont need to \ in a recent column. He was referring to the fact that if the UK economy grows then the automatic stabilisers will reduce the budget deficit, but if growth is not forthcoming, then the deficit will not contract automatically and that should be welcomed.
1781	Santa Claus and his elves are in danger of becoming environmental refugees because
472	Santa Claus has gone home to
202	Santa Claus is actually a secret agent for the socialist welfare state (by giving handouts to everyone) and should be subject to fiscal rules which would force him/her to tax all children the same amount as the gift so as to teach them fiscal prudence.
2559	Santa is having trouble keeping his sled and related delivery infrastructure in working order. But
1150	Santa is having trouble keeping his sled and related delivery infrastructure in working order. But he knows
2259	Santa is having trouble keeping his sled and related delivery infrastructure in working order. But he knows
1335	Say a currency-issuing government plans to achieve a fiscal surplus of 0.1 per cent of GDP in the next financial year. The aim underpins a massive fiscal shift from a fiscal deficit of around 3 per cent of GDP in that period. If the actual fiscal outcome remains in deficit at the end of the following financial year, the said government will be rightly considered not to have gone hard enough on its fiscal austerity plans.
2396	Say, we form the view that over the next year: (a) the average working week will be constant in hours; (b) real GDP growth rate will be 3 per cent; (c) output per unit of labour input (persons) will grow at 1.5 per cent; and (d) the labour force will maintain a growth rate of 1.5 per cent per annum. We would project that the unemployment rate
2524	Say, we form the view that over the next year: (a) the average working week will be constant in hours; (b) real GDP growth rate will be 3 per cent; (c) output per unit of labour input (persons) will grow at 1.5 per cent; and (d) the labour force will maintain a growth rate of 1.5 per cent per annum. We would project that the unemployment rate
1947	Short-term interest rates are set by the central bank while the fiscal strategy manifests in tax and spending decisions by the government. Whereas the non-government sector cannot directly influence the interest rate target being set, it does, ultimately, determine the size of the fiscal deficit at any point in time.
115	Short-term interest rates are set by the central bank while the fiscal strategy manifests in tax and spending decisions by the government. Whereas the private sector cannot directly influence the interest rate target being set it can determine the size of the budget deficit at any point in time.
323	Short-term interest rates are set by the central bank while the fiscal strategy manifests in tax and spending decisions by the government. Whereas the private sector cannot directly influence the interest rate target being set it can determine the size of the budget deficit at any point in time.
399	Short-term interest rates are set by the central bank while the fiscal strategy manifests in tax and spending decisions by the government. Whereas the private sector cannot directly influence the interest rate target being set the budget outcome at any point is not something the government can control.
149	Short-term market-driven interest rate movements in a modern monetary economy are the means through which household savings and business investment plans are mediated.
1092	So-called \progressives\ tend to argue that if austerity is to be imposed it is better to increase taxes (particularly on high income earners). Conversely, \conservatives\ demand spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
2053	Some mainstream economists claim that a public debt ratio of 80 per cent is a dangerous threshold that should not be passed. Accordingly, governments should run primary surpluses (taxation revenue in excess of non-interest government spending) to keep the ratio below the threshold. Modern monetary theory tells us that while a currency-issuing government running a deficit can never reduce the debt ratio it doesn't matter anyway because such a government faces no risk of insolvency.
669	Some \Occupy Wall Street\ protesters are demanding that bank lending should be more closely regulated to ensure that all bank loans were backed by reserves held at the bank. However, this would unnecessarily reduce the capacity of the banks to lend.
1098	Some progressives call for bank lending to be more closely regulated to ensure that all bank loans were backed by reserves held at the bank to stop another credit binge. However, financial market interests argue that this would unnecessarily reduce the capacity of the banks to lend and damage the economy. Both are wrong.
2094	Some progressives call for bank lending to be more closely regulated to ensure that all bank loans were backed by reserves held at the central bank to stop another credit binge. However, financial market interests argue that this would unnecessarily reduce the capacity of the banks to lend and damage the economy. Both are wrong.
136	Sovereign funds do not store budget surpluses as national savings. They just account for assets that the government has bought in the same way that the property records of, say, the public schools and hospitals record holdings of other public assets accumulated through government spending.
321	Sovereign funds do not store budget surpluses as national savings. They just account for assets that the government has bought in the same way that the property records of, say, the public schools and hospitals record holdings of other public assets accumulated through government spending.
1442	Sovereign government spending becomes more costly when the bond markets push up yields on new bond issues.
1137	Sovereign government spending becomes more costly when the bond markets push yields on new public bond issues up.
1256	Sovereign government spending becomes more costly when the bond markets push yields on new public bond issues up.
2243	Sovereign government spending becomes more costly when the bond markets push yields on new public bond issues up.
2393	Sovereign government spending becomes more costly when the bond markets push yields on new public bond issues up.
2518	Sovereign government spending becomes more costly when the bond markets push yields on new public bond issues up.
1403	Sovereign government spending becomes more expensive when government bond yields for new issues rise.
1830	Sovereign government spending becomes more expensive when government bond yields for new issues rise.
707	Sovereign government spending becomes more expensive when government bond yields for new issues rise.
858	Spain has reduced its budget deficit over the last 12 months through austerity. A declining deficit indicates that the government fiscal stance is becoming more contractionary.
991	Special Xmas Holiday Question: Santa Claus and his elves are in danger of becoming environmental refugees because
2424	Special Xmas Holiday Question: Santa is having trouble keeping his sled and related delivery infrastructure in working order. But he knows
693	Specific legal considerations aside, it would be impossible for a government to avoid issuing debt to the private sector when running a budget deficit while the central bank was targeting a positive short-term policy rate.
2076	Specific legal considerations aside, it would be impossible for a government to avoid issuing debt to the private sector when running a fiscal deficit while the central bank was targeting a positive short-term policy rate.
2540	Specific legal considerations aside, it would be impossible for a government to avoid issuing debt to the private sector when running a fiscal deficit while the central bank was targeting a positive short-term policy rate.
1693	Standing facilities (credit lines etc) that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
2165	Standing facilities (credit lines etc) that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
838	Standing facilities (credit lines etc) that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
958	Standing facilities (credit lines etc) that central banks maintain means that the monetary supply is always responding to changes in the monetary base.
1016	Standing facilities that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
2433	Standing facilities that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
711	Standing facilities that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
1379	Standing facilities that central banks maintain with commercial banks means that the money supply always adjusts to movements in the monetary base.
1816	Start from a situation where both the external surplus and the fiscal surplus are equal to 2 per cent of GDP. If the fiscal balance stays constant and the external surplus rises to be 4 per cent of GDP then national income has to rise and the private domestic balance moves from 0 to 2 per cent of GDP.
1096	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the budget surplus is 2 per cent. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then
579	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the budget surplus is 2 per cent. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then
672	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the budget surplus is 2 per cent. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then
781	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the budget surplus is 2 per cent. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then you can conclude that National income also rises and the private surplus moves from 0 per cent of GDP to 2 per cent of GDP.
1849	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the fiscal surplus is 2 per cent. If the fiscal balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then
2296	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the fiscal surplus is 2 per cent. If the fiscal balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then
1305	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the fiscal surplus is 2 per cent. If the fiscal balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then you can conclude that National income also rises and the private surplus moves from 0 per cent of GDP to 2 per cent of GDP.
2092	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the fiscal surplus is 2 per cent. If the fiscal balance was to stay constant and the external surplus rises to the equivalent of 4 per cent of GDP then
1341	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the fiscal surplus is 2 per cent of GDP. If the fiscal balance remains unchanged and the external surplus rises to 4 per cent of GDP then
1478	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the fiscal surplus is 2 per cent of GDP. If the fiscal balance stays constant as a percent of GDP and the external surplus rises to the equivalent of 4 per cent of GDP then
1576	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the government fiscal surplus surplus is 2 per cent. If the government fiscal balance stays constant as a per cent of GDP and the external surplus rises to the equivalent of 4 per cent of GDP, then you can conclude that national income also rises and the private surplus moves from 0 per cent of GDP to 2 per cent of GDP.
1160	Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the government surplus is 2 per cent. If the government balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then
927	Starting from the external situation in Question 1, with the surplus being the equivalent of 2 per cent of GDP but this time the budget surplus is currently 2 per cent of GDP. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then you can conclude that national income also rises and the private surplus moves from minus 2 per cent of GDP to plus 2 per cent of GDP.
1321	Starting from the external situation in Question 1, with the surplus being the equivalent of 2 per cent of GDP but this time the fiscal surplus is currently 2 per cent of GDP. If the fiscal balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then you can conclude that national income also rises and the private surplus moves from minus 2 per cent of GDP to plus 2 per cent of GDP.
1408	Starting from the external situation in Question 1, with the surplus being the equivalent of 2 per cent of GDP but this time the fiscal surplus is currently 2 per cent of GDP. If the fiscal balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then you can conclude that national income also rises and the private surplus moves from minus 2 per cent of GDP to plus 2 per cent of GDP.
1662	Students are taught that the macroeconomic income determination system can be thought of as a bath tub with the current GDP being the water level. The drain plug can be thought of as saving, imports and taxation payments (the so-called leakages from the expenditure system) while the taps can be thought of as investment, government spending and exports (the so-called exogenous injections into the spending system). This analogy is valid because GDP will be unchanged as long as the flows into the bath are equal to the flows out of it which is tantamount to saying the the spending gap left by the leakages is always filled by the injections.
1922	Students are taught that the macroeconomic income determination system can be thought of as a bath tub with the current GDP being the water level. The drain plug can be thought of as saving, imports and taxation payments (the so-called leakages from the expenditure system) while the taps can be thought of as investment, government spending and exports (the so-called exogenous injections into the spending system). This analogy is valid because GDP will be unchanged as long as the flows into the bath are equal to the flows out of it which is tantamount to saying the the spending gap left by the leakages is always filled by the injections.
2055	Students are taught that the macroeconomic income determination system can be thought of as a bath tub with the current GDP being the water level. The drain plug can be thought of as saving, imports and taxation payments (the so-called leakages from the expenditure system) while the taps can be thought of as investment, government spending and exports (the so-called exogenous injections into the spending system). This analogy is valid because GDP will be unchanged as long as the flows into the bath are equal to the flows out of it which is tantamount to saying the the spending gap left by the leakages is always filled by the injections.
251	Students are taught that the macroeconomic income determination system can be thought of as a bath tub with the current GDP being the water level. The drain plug can be thought of as saving, imports and taxation payments (the so-called leakages from the expenditure system) while the taps can be thought of as investment, government spending and exports (the so-called exogenous injections into the spending system). This analogy is valid because GDP will be unchanged as long as the flows into the bath are equal to the flows out of it which is tantamount to saying the the spending gap left by the leakages is always filled by the injections.
2249	Suppose a government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private domestic sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
2405	Suppose a government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private domestic sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
2527	Suppose a government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private domestic sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
1146	Suppose a government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
2300	Suppose an economy produces two products: Product A and Product B. This is the data for two years. By how much has the economy grown between Year 1 and Year 2?\n\n<br />\n<br />\n<table>\n<tbody>\n<tr>\n<td style=\border-bottom: 1px solid black; border-top: 1px solid black;\>Product</td>\n<td style=\text-align:center; border-bottom: 1px solid black; border-top: 1px solid black;\>Year 1 Price Per Unit ($)</td>\n<td style=\text-align:center; border-bottom: 1px solid black; border-top: 1px solid black;\>Year 1 Output (units)</td>\n<td style=\text-align:center; border-bottom: 1px solid black; border-top: 1px solid black;\>Year 2 Price Per Unit ($)</td>\n<td style=\text-align:center; border-bottom: 1px solid black; border-top: 1px solid black;\>Year 2 Output (units)</td>\n</tr>\n\n<tr>\n<td>Product A</td>\n<td style=\text-align:center;\>1.00</td>\n<td style=\text-align:center;\>20</td>\n<td style=\text-align:center;\>2.50</td>\n<td style=\text-align:center;\>10</td>\n</tr>\n\n<tr>\n<td style=\border-bottom: 1px solid black;\>Product B</td>\n<td style=\text-align:center; border-bottom: 1px solid black;\>2.00</td>\n<td style=\text-align:center; border-bottom: 1px solid black;\>15</td>\n<td style=\text-align:center; border-bottom: 1px solid black;\>3.00</td>\n<td style=\text-align:center; border-bottom: 1px solid black;\>25</td>\n</tr>\n</tbody>\n</table>
1234	Suppose that the government announced as part of a fiscal austerity strategy that it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. In that situation we would not be able to conclude that the fiscal austerity plans would undermine growth if the net export projection was realised.
895	Suppose that the government announced as part of a fiscal austerity strategy that it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. In that situation we would not be able to conclude that the fiscal austerity plans would undermine growth if the net export projection was realised.
1639	Suppose that the government announced as part of a fiscal austerity strategy that it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year while net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. In that situation we would not be able to conclude that the fiscal austerity plans would undermine growth if the net export projection was realised.
1854	Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports plus net income flows were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
1107	Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
865	Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
1430	Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If the private domestic sector engaged in debt reduction which resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
1030	Take an economy that is running a current account deficit equivalent to 2 per cent of its GDP with a government recording a budget surplus of 2 per cent of GDP. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then you can conclude that national income also rises and the private domestic sector switches from a position where it is spending more than it is earning (deficit equivalent to 2 per cent of GDP) to a position where it is saving overall by 2 per cent of GDP.
1929	Take the following situation reported in a nation's Labour Force data. Employment grew by only 400 in net terms in the previous month. Other highlights were that unemployment rose by 10,700 and that the labour force participation rate fell by 0.1 per cent. Taken together this data tells you that
670	Taxation creates unemployment.
13	Taxation functions
540	Taxation is an essential part of a fiat monetary system and allows the national government to spend.
293	Taxation provides the necessary resources to a sovereign national government to allow it to maintain full employment
72	Taxation revenue will rise as the budget deficits rise because
1097	Taxes do not fund government spending but they do create unemployment.
1190	Tax revenue provides a national government with non-inflationary spending capacity.
1231	The ability of a central bank to target a positive interest rate as an expression of its monetary policy stance is independent of the volume of debt it might purchase from the treasury (via primary issue) to match the government's fiscal deficit.
868	The accumulated spending build-up of annual budget deficits does not pose an inflation threat.
1865	The accumulated spending build-up of annual fiscal deficits does not pose an inflation threat.
1027	The accumulated stock of government spending associated with continuous budget deficits can increase the risk of inflation faced by an economy.
720	The accumulated stock of spending associated with continuous budget deficits may eventually increase the risk of inflation faced by an economy.
1797	The achievement of a fiscal surplus indicates that the national government is
1687	The act of issuing debt by a sovereign government logically
1119	The advantage of the government issuing bonds to match its deficit rather than just instructing the central bank to credit bank accounts in recognition of its spending intentions is that the private sector is wealthier as a consequence.
1782	The Australian Bureau of Statistics does not record official reindeer numbers. However, the Population Census tells us that there are several deer farmers in Australia who could help Santa should any of his deer get tired as he flies around Australia in the early hours of Monday morning. The Census shows that there are
159	The Australian central bank (RBA) decision to raise interest rates is designed to increase the rates banks have to pay to attract deposits and thus undermines their capacity to make loans and fuel a renewed credit binge.
1370	The Australian dollar has appreciated in recent days but the damaging effects on our international competitiveness can be offset if local workers accept a cut in nominal wages and the rate of inflation is contained.
1722	The Australian dollar has appreciated recently against many key currencies. This has squeezed some of export industries (such as manufacturing) which are not enjoying a commensurate growth in world demand for their products. A cut in real wages is needed to restore international competitiveness in the industries that are under pressure.
803	The Australian dollar has appreciated strongly against many of the key currencies over the last few years as a result of record terms of trade and the strong world demand for mining output. The appreciating dollar has significantly reduced our international competitiveness and harmed other export sectors - manufacturing and agriculture - who have not enjoyed the same buoyant world demand for their output. Export competitiveness will rise under these conditions if local workers accept a cut in nominal wages and the rate of inflation is contained.
427	The Australian dollar is currently appreciating strongly against many key currencies and this has put pressure on our international competitiveness. Given the terms of trade are so strong, a cut in wages and the rate of inflation would be the way to restore competitiveness. This would help maintain strong export growth.
645	The Australian dollar is currently appreciating strongly against many key currencies because the Asian growth phase is increasing demand for our mining exports. This has put pressure on our international competitiveness which is squeezing other export industries (such as manufacturing) which are not enjoying a commensurate growth in world demand. A cut in domestic wages and the rate of inflation would restore competitiveness in the industries that are under pressure.
557	The Australian dollar is currently appreciating strongly against many of the key currencies and this has put pressure on our international competitiveness. Export competitiveness will be restored under these conditions if local workers accept a cut in nominal wages and the rate of inflation is contained.
39	The Australian economy has in net terms generated 62.2 thousand jobs since February 2008, but unemployment rate has risen from 3.9 per cent to its current 5.4 per cent. This is because
1211	The Australian government brought down its fiscal statement (aka 'The Budget') this week and estimated that its fiscal deficit would shrink from 3.1 per cent of GDP in 2013-14 to 1.8 per cent of GDP in 2014-15. This signals that the government is intending to adopt a less expansionary fiscal policy strategy in 2014-15 than in the previous fiscal year.
1244	The Australian government has just introduced harsh new measures against the unemployed. The government is exploiting the  popular view that the unemployed on income support benefits live off the hard work of those who pay taxes. The popular view has validity.
518	The Australian government is aiming to get real GDP growth back on the trend that was observed over the last decade - around 3 per cent per annum. If labour productivity grows at 1.5 per cent per annum and the labour force grows at 2 per cent per annum and the average working week is constant in hours, then this policy (if successful) will see the unemployment rate rising.
57	The Australian government is in a better position to weather this current crisis and expand the deficit
1774	The Australian National Accounts data came out this week and showed that annual real GDP growth was running at 2.8 per cent per annum. Labour productivity growth over the last few years is around 1.3 per cent per annum, while the labour force has on average grown at 1.65 per cent per annum over the last two years. If the current GDP growth rate is sustained, average weekly working hours are unchanged, and the other aggregates behave according their recent averages then we should expect to see the unemployment rate rising.
980	The Australian National Accounts data came out this week and the federal government maintained its assertion that the annualised growth rate revealed (3.1 per cent) was around the trend established over the last decade (3.2 per cent). They reaffirmed their policy aim, which is to keep real GDP growth at that trend rate. If labour productivity grows at 1.5 per cent per annum and the labour force grows at 2 per cent per annum and the average working week is constant in hours, then this policy (if successful) will see the unemployment rate rising.
26	The Australian (or US, for that matter) government's net spending is
46	The Australian Treasury equates the NAIRU with full employment and uses this to calibrate their structural deficit estimates. Accordingly, these deficit estimates will be
1990	The Australian Treasury equates the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with full employment and uses this to calibrate their structural deficit estimates. Accordingly, the structural deficits reported will typically be
309	The Australian Treasury equates the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with full employment and uses this to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be
1685	The Australian Treasury like many official agencies equates the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with full employment and uses this to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be
126	The Austrian School is correct in one way that we should acknowledge. If there is a lack of desire to save among households then investors will find it difficult to get funds at reasonable prices to build productive capacity.
69	The automatic stabilisers
1009	The automatic stabilisers always support growth when the economic growth is slowing.
2429	The automatic stabilisers always support growth when the economic growth is slowing.
699	The automatic stabilisers are supporting growth in Europe.
1743	The automatic stabilisers built into fiscal policy operate to return the government's fiscal balance returns to its appropriate level once growth returns to trend following a downturn.
821	The automatic stabilisers built into national government budgeting are at present operating in a counter-cyclical manner in the Eurozone.
2290	The automatic stabilisers built into national government fiscal frameworks work in a counter-cyclical manner.
1136	The automatic stabilisers built into national government fiscal policy always operate in a counter-cyclical manner.
1255	The automatic stabilisers built into national government fiscal policy always operate in a counter-cyclical manner.
2242	The automatic stabilisers built into national government fiscal policy always operate in a counter-cyclical manner.
2392	The automatic stabilisers built into national government fiscal policy always operate in a counter-cyclical manner.
2517	The automatic stabilisers built into national government fiscal policy always operate in a counter-cyclical manner.
1658	The automatic stabilisers built into national government fiscal policy operate in a counter-cyclical manner.
1229	The automatic stabilisers built into the fiscal framework always work in a counter-cyclical fashion and if not unencumbered by discretionary policy changes, such as fiscal austerity, will eventually ensure that the government fiscal balance returns to its appropriate level.
2184	The automatic stabilisers built into the fiscal framework operate in a counter-cyclical fashion and ensure that the government fiscal balance, which rises during a recession, returns to its appropriate level once growth resumes.
1127	The automatic stabilisers built into the government budget work counter-cyclically and push the budget balance back to its appropriate level after a major cyclical disturbance.
998	The automatic stabilisers built into the government budget work counter-cyclically to ensure that the budget balance returns to its appropriate level after a cyclical disturbance.
2251	The automatic stabilisers increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle could be eliminated if the government followed a fiscal rule such that it had to balance its fiscal position at all times.
2548	The automatic stabilisers increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the economic cycle could be eliminated if the government followed a fiscal rule such that it had to balance its fiscal position at all times.
2421	The automatic stabilisers increase fiscal deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the fiscal outcome to the business cycle would be eliminated if the government followed a fiscal rule that forced them to balance spending and taxation at all times.
630	The automatic stabilisers operate in a counter-cyclical fashion and ensure that the government budget balance, which rises during a recession,  returns to its appropriate level once growth resumes.
867	The automatic stabilisers operate in a counter-cyclical fashion and ensure that the government budget balance, which rises during a recession, returns to its appropriate level once growth returns to its long-term trend.
1431	The automatic stabilisers operate in a counter-cyclical fashion and ensure that the government fiscal balance, which rises during a recession, returns to its appropriate level once growth returns to its long-term trend.
661	The automatic stabilisers operate to return the government budget balance returns to its appropriate level once growth returns following a downturn.
83	The automatic stabilisers that are built into fiscal policy ensure that
1715	The automatic stabilisers, that are built into fiscal policy settings, operate in a counter-cyclical fashion and ensure that the government fiscal balance, which rises during a recession, returns to its appropriate level once growth resumes.
2383	The automatic stabilisers work counter-cyclically without any discretionary changes by government and push the fiscal balance back to its appropriate level after a major cyclical disturbance.
1988	The automatic stabilisers work in a counter-cyclical fashion and ensure that the government fiscal balance returns to its appropriate level.
1788	The automatic stabilisers work in a counter-cyclical fashion and ensure that the government fiscal balance returns to its appropriate level following a recession.
1456	The automatic stabilisers work to underpin total spending in times of economic contraction. While the proportion of the fiscal outcome that operates in this way is not directly observable, the estimates provided by institutions such as the OECD and the IMF are overly pessimistic.
626	The Balanced Budget amendment being proposed in the US where the federal government would have to match revenue and spending in each fiscal year ensures that discretionary government spending will always be pro-cyclical.
2143	The Bank of England will, under a new arrangement with H.M. Treasury, be able to credit bank accounts on behalf of government, without the government having to match its fiscal deficits with private debt issuance. This means they will not be able to maintain an interest rate target above zero per cent.
87	The billions of US dollars that the Federal Reserve in America has pumped into reserves has made it easier for commercial banks to lend and kick start the economy.
842	The British government received advice recently that said the estimated output gap measures was less than previously thought. If that advice was true, then other things equal, the government's discretionary fiscal austerity would have to be intensified to balance the structural budget.
923	The British government's budget deficit has been rising despite the Government's stated fiscal austerity stance. We can conclude from the evidence at hand that the austerity mantra of the British government doesn't correctly describe its fiscal policy stance.
1082	The British government's budget deficit remains well above the targets announced in the budget, which means that the government's claims that it is pursuing fiscal austerity are false.
818	The British government's budget deficit rose in March 2012. We can conclude from that result that it is still pursuing an expansionary fiscal policy despite the political rhetoric about austerity.
1562	The British government's fiscal deficit rose despite the Conservative government's stated fiscal austerity stance. We can conclude from that fact that the austerity mantra of the British government doesn't correctly describe its fiscal policy stance.
1427	The British Labour Party under its new leadership is still wedded to eliminating the fiscal deficit. However, it has stated it prefers tax increases rather than spending cuts whereas so-called \conservatives\ recommend spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
1946	The build-up of Chinese holdings of US government debt has allowed US citizens to enjoy a higher material standard of living at the expense of the residents of China.
93	The capacity of the central bank to conduct monetary policy is not independent of the level of bank reserves unless they pay interest on excess reserves.
1100	The central bank can influence the supply of money via the price it provides reserves to the commercial banks but this influence is compromised by the level at which it sets the target monetary policy rate.
1792	The central bank can influence the supply of money via the price it provides reserves to the commercial banks but this influence is compromised by the level at which it sets the target monetary policy rate.
499	The central bank can influence the supply of money via the price it provides reserves to the commercial banks but this influence is compromised by the level at which it sets the target monetary policy rate.
510	The central bank cannot directly purchase treasury debt to facilitate the national governments budget deficit (that is, \monetise the deficit\) if it targets a positive short-term policy rate.
272	The central bank could always use quantitative easing to control interest rates at any maturity along the yield curve if it desired. The only thing stopping it are political constraints.
164	The central bank has no greater capacity under fixed exchange rates to defend its currency against a short-selling speculative attacks than it has under a system of flexible exchange rates.
876	The central bank sets the short-run interest rate and as part of its liquidity management functions can pay any rate on excess reserves held by the commercial banks that it chooses.
1446	The central bank sets the short-run interest rate, and its associated liquidity management functions puts a limit of the rate it can pay on excess reserves held by the commercial banks.
236	The change in the net worth of the non-government sector when the government increases its net spending is invariant to government issuing debt $-for-$ to match the net spending rise.
338	The change in the net worth of the non-government sector when the government increases its net spending is invariant to government issuing debt $-for-$ to match the net spending rise.
414	The change in the net worth of the non-government sector when the government increases its net spending is invariant to government issuing debt which exactly matches ($-for-$) the increase in net public spending.
239	The Chinese government can always convert its US dollar holdings back into its own currency, although the increase the supply of US dollars into the foreign exchange market would provoke a depreciation of the US dollar.
216	The claim by mainstream economists that a generalised real wage cut will increase employment at the macroeconomic level because firms will face lower costs and thus output will expand, relies on the assumption that the factors that determine aggregate demand (expenditure decisions) are independent of the factors that determine aggregate supply (output and pricing decisions). In practice this assumption is false.
17	The comment that budget deficits lead to higher taxation is
2127	The Confederate government in 1861 could have eased the inflationary impact of its war spending by issuing more bonds than it did.
526	The Confederate government in 1861 could have eased the inflationary impact of its war spending by issuing more bonds than it did.
1331	The conservative Australian government recently scrapped the mining tax that had been introduced by the previous government. The conservatives argued that the higher taxes had distorted the allocation of resources by changing the rates of return on different uses of capital (and labour). The previous tax had taken the form of a Resource Super Profits Tax on mining companies. Leaving aside the arguments that the government does not need revenue to spend, a typical mainstream economist would agree with the conservative government's decision and conclude that the tax was bad because it reduced mining investment.
1678	The cost of spending by a sovereign government increases when the bond markets push yields on new government bond issues up.
732	The creation of a sovereign wealth fund from the proceeds of a budget surplus represents increased national savings.
1511	The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is
409	The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is
1189	The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is that under the former system
2207	The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is that under the former system
2378	The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is that under the former system
2488	The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is that under the former system
1051	The crucial difference between a monetary system based on the convertible currency (gold standard) model and a fiat currency monetary is that under the former system
2329	The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is
333	The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is
52	The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is
2012	The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is that under the former system
1977	The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is, that under the former system
2469	The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is, that under the former system
1291	The current period is marked by private households increasing their saving ratios (from disposable income) and firms declining to invest. These trends indicate that fiscal deficits have to be higher to avoid further employment losses.
701	The current strategy for the Eurozone is for member states to undertake a painful internal devaluation to restore growth and the austerity programs are designed to deflate nominal wages and prices to facilitate that adjustment. The aim is for Greece, for example, to reduce its real unit labour costs faster than their trading partners can. For the logic to follow then if wages and prices fall at the same rate, labour productivity has to rise and employment has to fall.
10	The current trend to increasing budget deficits
1084	The data shows that the private domestic sector in a nation with a very small external deficit (as a % of GDP) is spending less than it earns. However, you cannot tell what the government budget balance will be as a percentage of GDP until you know whether the external balance offsets the private domestic balance.
2343	The debate about creating a European-wide bond has been motivated by the desire to prevent sovereign defaults among member countries who are having trouble covering their net spending positions with market-sourced finance. The solvency risk is however sourced in the restrictions imposed on deficit and debt ratios by the Stability and Growth Pact which member states voluntarily agreed to.
1327	The debt issued by a currency-issuing government in its own currency is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debt but also has to repay them at the due date.
1522	The debt of a currency-issuing government with a floating exchange rate is not really a liability because the government can just continuously roll the debt over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt but also has to repay them at the due date.
2356	The debt of a government which issues its own currency and floats it in international markets is not really a liability because the government can just continuously roll it over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt but also has to repay them at the due date.
2499	The debt of a government which issues its own currency and floats it in international markets is not really a liability because the government can just continuously roll it over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt but also has to repay them at the due date.
351	The debt of a government which issues its own currency and floats it in international markets is not really a liability because the government can just continuously roll it over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt but also has to repay them at the due date.
1982	The debt of a government which issues its own currency and floats it in international markets is not really a liability because the government can just continuously roll it over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt obligations but also has to repay them at the due date.
1230	The decision by the government to issue debt to the non-government sector to match its fiscal deficit instead of selling the same debt to the central bank
2187	The difference between a situation where the government runs a deficit and matches it with debt-issuance to the non-government sector to a situation where debt is only issued to the central bank is that non-government sector financial wealth rises in the first case.
2018	The difference between quantitative easing and an increasing fiscal deficit is that the former creates no new net financial assets in the currency of issue.
1138	The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome
2083	The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome
2244	The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome
2385	The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome
2513	The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome
2544	The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome
1039	The distribution of national income has shifted in most advanced nations over the last two decades in favour of profits and has forced workers to increase their debt levels to maintain consumption growth. This trend will only be reversed if workers can secure higher wages each year in line with the growth of labour productivity.
1223	The distribution of national income has shifted in most advanced nations over the last two decades in favour of profits. This trend will only stabilise if workers can secure wage increases in line with the growth of labour productivity.
755	The distribution of national income has shifted in most advanced nations over the last two decades in favour of profits. This trend will only stabilise if workers can secure wage increases in line with the growth of labour productivity.
805	The Easter Bunny thinks that banks do not need reserves to make loans. He is clearly correct and anyone, including the majority of mainstream economists and leading Op Ed writers in major city newspapers, are wrong on this point.
1903	The ECB has announced that it will taper its quantitative easing over the next few months. The steady decline in purchases of government bonds from the non-government sector will reduce the growth of net financial assets in that sector.
973	The estimates of structural budget deficits by multilateral agencies such as the IMF and the OECD, will usually lead one to conclude that a government's discretionary fiscal position is more expansionary than it actually is.
1125	The estimates provided by institutions such as the OECD and the IMF of the size of the automatic stabilisers are typically biased downwards.
2227	The estimates provided by institutions such as the OECD and the IMF of the size of the automatic stabilisers are typically biased downwards.
744	The EU/IMF/ECB strategy for ailing Eurozone nations is twofold. First, engineer a cut in real wages to improve external competitiveness. Second, push the government back into surplus. The aim is for net exports to grow and replace the loss of spending arising from fiscal austerity. Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
658	The EU/IMF/ECB strategy for Greece is twofold: (a) cutting real wages to improve external competitiveness; and (b) pushing the government back into surplus. The aim is to reduce the budget deficit without compromising real economic growth. It is hoped that an increase in net exports will replace the loss of spending from fiscal austerity. Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. In that situation we would conclude that the fiscal austerity plans would not undermine growth if the net export projection was realised.
1044	The Euro member nations would eliminate their exposure to solvency risk if they exited the Eurozone and issued their own floating currency.
209	The Euro monetary system could not possibly be an Optimal Currency Area because wages are not flexible across the member states.
2180	The European Commission has temporarily relaxed the fiscal restrictions on national governments that are applicable under the Stability and Growth Pact, which means that the solvency risk facing several EMU members is also temporarily resolved.
860	The Eurozone countries will only start to reduce their public debt ratio when the respective governments succeed in running primary budget surpluses (that is, spending net of interest payments is less than taxation revenue).
1812	The Eurozone nations have to endure internal devaluation (nominal wages and prices deflation and/or productivity growth) to adjust to external imbalances. It is claimed that this process will the individual nations more competitive as long as real unit labour costs fall faster than their trading partners. However, ignoring whether the logic is correct or not, which of the following propositions must also follow if the logic is to follow
1258	The Eurozone recovery strategy for Greece and other nations is relying on a export boom, to replace the lost spending arising from the fiscal austerity. Even if net exports turn positive and more than offset the loss of government net spending, there is no guarantee that the Greek economy will resume growth.
809	The Eurozone Troika's strategy for Greece is that domestic deflation will spark an export boom and provide the capacity for the government to run primary surpluses without compromising real economic growth. Although an export boom is unlikely, given current circumstances, if Greece actually achieved positive net exports then the government could push for a primary budget surplus knowing it will not compromise growth.
1059	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
1384	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
1805	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
237	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
337	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
413	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
1277	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance compared to a situation when it issued no debt.
523	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance compared to a situation when it issued no debt.
1194	The expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance than if it just instructed the central bank to fund its spending account. This is because debt-issuance drains excess reserves resulting from the deficits and purchasing power is accordingly withdrawn from the monetary system.
1627	The expansionary impact of deficit spending on aggregate demand will be lower when the government matches its fiscal deficit with debt-issuance compared to a situation where it issues no debt.
1589	The expansionary impact of deficit spending on aggregate spending (demand) is lower when the government matches the deficit with debt-issuance because then excess reserves are drained and the purchasing power is taken out of the monetary system.
2307	The expenditure multiplier will be largest in which case
48	The experience of Norway with its strong net exports contribution shows that
1597	The extended period of quantitative easing in many nations has not seen inflation accelerate. This strongly refutes the mainstream theory of inflation embodied in the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
1802	The fact that a sovereign government is never financially constrained means that it will always be able to provide first-class health care to an ageing population should it have the political will to do so.
1911	The fact that a sovereign government is never financially constrained means that they can always provide first-class health care even with rising dependency ratios associated with population ageing.
2500	The fact that inflationary pressures have followed large scale quantitative easing programs conducted by central banks validates the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
271	The fact that large scale quantitative easing conducted by central banks in Japan in 2001 and now in the UK and the USA has not caused inflation provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
1983	The fact that large scale quantitative easing conducted by central banks in Japan in 2001 and now, more recently, in the UK and the USA has not caused inflation provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
354	The fact that large scale quantitative easing conducted by central banks in Japan in 2001 and now, more recently, in the UK and the USA has not caused inflation provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
1523	The fact that large scale quantitative easing conducted by central banks in Japan, the UK, USA and more recently, in Europe has not caused inflation provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
2357	The fact that large scale quantitative easing programs conducted by central banks has not caused inflation, provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
43	The fact that the federal government has to pay back its debt
1674	The fact that the Portuguese government's fiscal balance has fallen from 4.2 per cent in 2015 to 2.1 per cent in 2016 allows us to conclude that it was seeking to decrease the size of government in the overall economic output.
62	The fact that the US dollar is the strongest international currency and is in high demand by international investors (including foreign governments) means that the US Government
109	The fall in hours worked is larger than the fall in persons employed, which economists refer to as \labour hoarding\ - that is, firms are holding onto persons but cutting their hours of work. If GDP growth over the next 12 months is 2 per cent and the labour force grows by 2 per cent, the labour hoarding will mean that the unemployment rate will continue to rise.
8	The federal budget deficit can be excessive
33	The Federal Government has announced a number of major infrastructure projects that it intends to fund (for example, its broadband plan and its defence plan). Their ability to implement these plans depends on
14	The federal stimulus package will fail
169	The fundamental flaw in all the mainstream macroeconomic models that construct the the business cycle as being the outcome of shifts in the labour supply is that actual quit behaviour by workers rises during a boom and declines during a recession.
74	The German fiscal rule to ban deficits and run balanced budgets would work
1351	The government and the private domestic sectors cannot simultaneously reduce their debt levels (under current public sector debt-issuance arrangements)
533	The government and the private domestic sectors cannot simultaneously reduce their debt levels (under current public sector debt-issuance arrangements)
480	The government can always support private domestic sector saving in nominal terms by increasing the budget deficit and stimulating aggregate demand and national income.
1057	The government can run budget surpluses and still satisfy the private domestic sector desire to save overall as long as the external sector is in surplus.
50	The Government could stimulate employment growth by cutting real wages across the board (which would not alter wage relativities unfairly)
2097	The government deficit outcome each year published by the relevant statistical agencies summarises the economic policy stance of the government.
73	The government deficits may ultimately lead to higher tax rates being imposed
1744	The government has to issue debt if the central bank is targetting a non-zero policy rate and is reluctant to pay a competitive return on excess bank reserves.
1204	The government has to issue debt if the central bank is targetting a non-zero policy rate and is reluctant to pay a return on excess bank reserves.
1571	The government has to issue debt if the central bank is targetting a non-zero policy rate and is reluctant to pay a return on excess bank reserves.
662	The government has to issue debt if the central bank is targetting a non-zero policy rate and is reluctant to pay a return on excess bank reserves.
864	The government has to issue debt if the central bank is targetting, say a 2 per cent short-term interest rate and declines to pay a return on excess bank reserves.
743	The government has to issue debt if the central bank is targetting, say a 3 per cent short-term interest rate and declines to pay a return on excess bank reserves.
2065	The government has to issue debt if the policy interest rate is positive unless the central bank pays a positive interest rate on overnight reserves.
1853	The government has to issue debt to match an on-going fiscal deficit if the central bank is targetting, say a 2 per cent short-term interest rate and declines to pay a return on excess bank reserves.
1613	The government has to issue debt to match its fiscal deficit if the central bank is targetting, say a 3 per cent short-term interest rate and declines to pay a return on excess bank reserves.
2099	The government has two macroeconomic policy arms available - fiscal and monetary policy. However, it only has control over monetary policy
730	The government has two macroeconomic policy arms available - fiscal and monetary policy. However, it only has control over monetary policy.
2476	The government is attempting to reduce the fiscal deficit. Private market orientated advisors tell them to cut government spending, whereas, the more civic-minded advisors argue that it is better to increase taxes in an equitable way than to engage in harsh spending cuts. Which policy option - a tax rate increase that will increase tax revenue at the current level of national income by $x or a spending cut of $x - will have the greater initial impact on aggregate demand?
1590	The government is attempting to stimulate the economy via a discretionary expansion of the fiscal deficit. The private market orientated advisors tell them to cut taxes and 'privatise' the expansion whereas the more civic-minded advisors argue that there is a need for improved public infrastructure which requires increases in government spending. So imagine that the government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x and a spending increase of $x. Which policy option will have the greater initial impact on aggregate demand?
415	The government is attempting to stimulate the economy via an expansion in the budget deficit. The private market orientated advisors tell them to cut taxes and \privatise\ the expansion whereas the more civic-minded advisors argue that there is a need for improved public infrastructure which requires increases in government spending. So imagine that the government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x and a spending increase of $x. Which policy option will have the greater initial impact on aggregate demand?
2336	The government is attempting to stimulate the economy via an expansion in the fiscal deficit. The private market orientated advisors tell them to cut taxes and \privatise\ the expansion whereas the more civic-minded advisors argue that there is a need for improved public infrastructure which requires increases in government spending. So imagine that the government is choosing between a tax cut that will reduce tax revenue at the current level of national income by $x and a spending increase of $x. Which policy option will have the greater initial impact on aggregate demand?
1124	The government needs to raise tax revenue in order to spend.
1481	The government sector and the private domestic sector can simultaneously net save (under current public sector debt-issuance arrangements).
612	The Greek crisis could significantly ease its current crisis if it improved its capacity to tax its higher income earning groups.
1328	The Greek crisis would be significantly eased if it could improve its tax collection arrangements to ensure that it had more financing available to cover its spending.
260	The Greek crisis would be significantly eased if it could improve its tax collection arrangements to ensure that it had more financing available to cover its spending.
232	The Greek government can become insolvent and be forced into default if bond markets \stop\ funding their spending. The same logic applies to Ireland, Spain and Portugal but not to Germany because the latter has a strong net export surplus.
591	The Greek government has been accused of not pursuing its fiscal austerity program with sufficient commitment. The fact that the Greek government budget deficit continues to increase is evidence of this.
359	The growth of bank reserves and the growth in the stock of money have followed a similar path in the recent crisis which signifies that credit creation has been tightly constrained by the recession.
482	The higher the tax revenue, the more the government can spend.
91	The huge build-up of reserves in the US Banking system make it easier for banks to lend to credit worthy customers.
961	The idea that government spending crowds out private spending is found in both Modern Monetary Theory (MMT) and mainstream economic theory.
1330	The IMF and its Troika partners claim that the recovery in Greece is dependent on internal devaluation and the austerity programs are designed to deflate nominal wages and prices which is claimed will make the economy more competitive as long as real unit labour costs fall faster than their trading partners. However, if wages and prices fall at the same rate, which of the following propositions must also follow if the IMF logic is to be consistent (ignoring whether the logic is correct or not)
380	The IMF and the European leaders all claim that Eurozone nations need to rely on internal devaluation to restore growth and so the austerity programs are designed to deflate nominal wages and prices. It is claimed that for each individual economy this strategy will render it more competitive as long as real unit labour costs fall faster than their trading partners. However, ignoring whether the logic is correct or not, which of the following propositions must also follow if the logic is to follow
2035	The IMF and the OECD and a range of central banks equate the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with their concept of full employment and they use the NAIRU estimates to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be
1512	The IMF and the OECD equate the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with their concept of full employment and they use the NAIRU to calibrate their structural deficit estimates. Accordingly, their estimates of the structural deficits will typically be
386	The IMF and the OECD equate the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with their concept of full employment and they use the NAIRU to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be
451	The IMF and the OECD equate the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with their concept of full employment and they use the NAIRU to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be
722	The IMF and the OECD typically evaluate government fiscal stance using estimates of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to represent full employment. If true full employment is less than the estimated NAIRU then these organisations will always consider the discretionary fiscal position to be more expansionary than it actually is.
571	The IMF are hoping that Greece will recover on the back of an export boom and this will provide the capacity for the government to reduce its budget deficit without compromising real economic growth. If Greece actually achieves positive net exports then the IMF strategy will be seen as working.
301	The IMF claims that \Greece needs to rely on internal devaluation\ and the austerity programs are designed to deflate nominal wages and prices which is claimed will make the economy more competitive as long as real unit labour costs fall faster than their trading partners. However, ignoring whether the logic is correct or not, which of the following propositions must also follow if the IMF logic is to follow
206	The IMF frequently publishes GDP per capita figures for nations and for comparative purposes it converts the local currencies into US dollar equivalents. The measures however are misleading because they will show a nation is suffering a decline in living standards relative to other countries on this ranking if the local currency appreciates against the US dollar even if there is no change in domestic command over resources in the local currency.
224	The IMF is forecasting that the US economy will grow by 2.7 per cent in real terms in 2010 and moderate to 2.4 per cent in 2011. At the end of 2009, the official unemployment rate in the US was 10 per cent. If real output per person employed grows constantly by 1.5 per cent in each of these years; the labour force grows by 1.2 per cent in 2010 and 1.3 per cent in 2011; and firms make no changes to average weekly hours overall, then you would expect the unemployment rate at the end of 2011 to be
940	The IMF recently admitted they had made serious errors in their modelling and grossly underestimated the size of spending multipliers. Economists use two multipliers to estimate the impact on GDP of an expansion in government spending associated with rising tax rates. The spending multiplier indicates the extent to which GDP rises as a result of the extra aggregate demand arising from the increased government spending. The tax multiplier indicates the impact of rising tax rates on GDP as labour supply is reduced because of the disincentives associated with taxation. The net effect on GDP is the sum of these two impacts. Assume that the government increases spending by $100 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 1.5 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current tax rate is equal to 30 per cent (so tax revenue rises by 30 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?
1360	The IMF recently downgraded their real GDP growth estimates for several advanced economies. One such economy is now projected to grow in real terms by around 2.1 per cent over the next 12 months. Real GDP per employed person is estimated to grow by 1.1 per cent over the same period and there is also the expectation that average weekly hours worked will remain more or less constant in 2013. Which of the following labour force growth rates would provide the basis for the forecast that the unemployment rate will be lower in 12 months time?
1043	The IMF recently downgraded their real GDP growth estimates. Taking the example of the Spain, it is now projected to contract in real terms by around 1.6 per cent in 2013 rather than 1.7 per cent as previously forecast. Real GDP per employed person is estimated to fall by about 0.9 per cent over the same period and the labour force is contracting slightly by about 0.1 per cent per annum. If average weekly hours worked will remain more or less constant in 2013, these projections would suggest that the unemployment rate will rise in 2013 by
937	The IMF recently downgraded their real GDP growth estimates. The US economy is now projected to grow in real terms by around 2.1 per cent in 2013. Real GDP per employed person is estimated to grow by 1.1 per cent over the same period and there is also the expectation that average weekly hours worked will remain more or less constant in 2013. Which of the following labour force growth rates would provide the basis for an expectation that the unemployment rate will be lower at the end of 2013 than at the beginning?
1894	The IMF use their estimates of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be
1904	The immediate change in the net worth of the non-government sector when the government increases its net spending is invariant to government issuing debt which exactly matches ($-for-$) the increase in net public spending.
1318	The immediate expansionary impact of a tax cut, designed to generate $x revenue at the current level of national income, will be less than an increase of public spending cut of $x.
1878	The immediate impact on aggregate spending in the economy would be invariant between the government matching its deficit spending with private bond issues and the situation where the government instructed the central bank to buy its bonds to match the deficit.
2029	The immediate impact on the net worth of the non-government sector does not vary if the government issued bonds to exactly match ($-for-$) the increase in its net public spending or chooses not to so match.
924	The impact on aggregate demand would be invariant between the government matching its deficit spending with private bond issues and the situation where the government instructed the central bank to buy its bonds to match the deficit.
1300	The imposition of a fiscal rule at the national government level its fiscal balance is required to be in balance at all times would eliminate swings in the balance driven by the automatic stabilisers.
198	The imposition of a fiscal rule at the national government level that the budget is required to be in balance at all times would eliminate budget swings driven by the automatic stabilisers.
328	The imposition of a fiscal rule at the national government level that the budget is required to be in balance at all times would eliminate budget swings driven by the automatic stabilisers.
2010	The imposition of a fiscal rule at the national government level that the fiscal account has to be in balance at all times would eliminate fiscal balance swings driven by the automatic stabilisers.
1974	The imposition of a fiscal rule at the national government level that the fiscal position is required to be in balance at all times would eliminate fiscal swings driven by the automatic stabilisers.
1412	The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards counter-cyclical responses when private spending is weak.
1872	The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards counter-cyclical responses when private spending is weak.
1893	The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards counter-cyclical responses when private spending is weak.
909	The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards counter-cyclical responses when private spending is weak.
778	The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards pro-cyclical responses when private spending is weak.
1061	The imposition of positive minimum reserve requirements on the private banks by the central bank, will have no constraining influence on the credit creation activities of the private banks relative to a system where there are no requirements other than the rule that reserve balances have to be positive.
783	The imposition of taxation is an essential element in a sovereign government's plan to implement and provision its socio-economic agenda.
1610	The imposition of taxes by the national government creates unemployment, other things equal.
1787	The imposition of taxes by the national government creates unemployment, other things equal.
468	The imposition of taxes by the national government creates unemployment, other things equal.
110	The imposition of taxes (without a concomitant injection of spending) by design creates unemployment (people seeking paid work) in the non-government sector. This allows a transfer of real goods and services from the non-government to the government sector via government spending.
1297	The increasing French government fiscal deficit is evidence that it has not pursued the European Commission's  austerity program with sufficient commitment.
1034	The inflation risk of government deficit spending is invariant between matching the change in net spending with funds provided by the central bank or issuing debt to the private bond markets.
592	The inflation risk under a fiat monetary system is no different to that which prevailed under a convertible currency system backed by gold with fixed exchange rates.
2122	The initial expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance compared to a situation when it issues no debt.
2451	The initial stock of non-government sector wealth is invariant to the decision by government to issues bonds to match its deficit spending as against not issuing any bonds.
108	The interest rate in the interbank market is the price that banks have to pay for overnight funds that are held in the reserve accounts the private banks hold at the central bank. If the total demand for reserves equals the total supply of reserves, then overnight interbank lending will not compromise the central banks short-term interest rate target.
186	The introduction of an employment guarantee where the federal government offers a minimum wage job to anyone who wanted one would require a modest increase in the budget deficit but there would never be a question that a sovereign government could not afford this program.
2169	The issuance of bonds by a currency-issuing government to match its net spending (fiscal deficit) augments the nominal wealth held by the non-government sector.
584	The issuance of bonds by the government to match its net spending (budget deficit) augments the nominal wealth held by the non-government sector.
1445	The Italian government's projected fiscal deficit for 2016 will be lower as a percentage of GDP than its estimated 2015 outcome. It is correct to conclude that in 2016 it will still be pursuing a contractionary fiscal policy stance despite the political rhetoric about its fiscal position being expansionary.
283	The lack of a close correspondence between the growth of bank reserves and the growth in the stock of money is evidence that credit creation has been tightly constrained by the recession.
1033	The larger the balances that the commercial banks have on account with the central bank the more they can lend to customers
2098	The largest challenge facing the world in the face of anthropomorphic climate change is
729	The largest challenge facing the world in the face of anthropomorphic climate change is
40	The largest reason why China has grown so fast in the period 2004-2008 has been
97	The latest ABS data shows that total hours worked are falling relative to total persons employed which must mean that underemployment is replacing unemployment.
344	The latest Australian Bureau of Statistics data shows that total hours worked in June 2010 fell while part-time employment (and total employment) grew. Unemployment stayed more or less constant. This signals rising underemployment.
25	The latest data shows that Australians have on average lost more than 12 per cent of their real wealth in the last year as a result of the GFC. This means
2305	The lesson that the Pompeii story taught us was that
532	The level of tax revenue has no bearing on the real spending capacity of a sovereign government.
1863	The logic of the Greek bailout packages is to force the government to run primary fiscal surpluses. This is because posting primary surpluses is the only way to reduce Greece's public debt ratio.
30	The losses that the Futures Fund (or any sovereign fund) has made on its share holding
1494	The mainstream macroeconomics conception of the banking system characterised by the concept of the money multiplier posits that changes in the monetary base are driven by changes in the money supply.
1909	The mainstream the Quantity Theory of Money claims that growth in the stock of money will be inflationary. The fact that the recent practice of large-scale quantitative easing (so-called printing money) in many nations has not generated any inflationary impulses is evidence that this 'Theory' is flawed.
2375	The marginal propensity to consume (MPC) is the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1 then the impact on aggregate demand for every new dollar of national income generated will be neutral.
2372	The massive build-up of Chinese holdings of US government debt allowed US citizens to enjoy a higher material standard of living overall at the expense of the residents of China.
2512	The massive build-up of Chinese holdings of US government debt allowed US citizens to enjoy a higher material standard of living overall at the expense of the residents of China.
114	The massive build-up of Chinese holdings of US government debt has allowed US citizens to enjoy a higher material standard of living at the expense of the residents of China.
322	The massive build-up of Chinese holdings of US government debt has allowed US citizens to enjoy a higher material standard of living at the expense of the residents of China.
398	The massive build-up of Chinese holdings of US government debt has allowed US citizens to enjoy a higher material standard of living overall at the expense of the residents of China.
1507	The massive build-up of Chinese holdings of US government debt indicates that Chinese investors have been funding the US government deficits.
2314	The MMT classification of exports as a cost means
1049	The Modern Monetary Theory (MMT) analysis of central bank liquidity management operations tells us that if such a bank was targeting a 4 per cent policy rate, it would still be able to directly purchase all the Treasury debt that might be issued to match a national government's budget deficit without compromising that monetary policy stance.
156	The modern monetary theory statement that governments borrow back their own spending is true but the assumption underlying it is that the purchasers of the debt do not use funds borrowed from their banks to buy the debt.
1128	The monetary base always adjusts by increasing when commercial banks increase their loans.
2384	The monetary base always adjusts by increasing when commercial banks increase their loans.
460	The monetary base always adjusts to changes in the money supply.
997	The monetary base always adjusts to changes in the money supply rather than the other way around.
1989	The monetary base always adjusts to the realised demand for credit by bank customers.
1355	The monetary base of an economy adjusts to changes in the money supply not the other way around.
178	The money multiplier concept is predicated on the notion that banks only lend when they have reserves and they get them by attracting deposits.
298	The money multiplier concept suggests that changes in the monetary base are transmitted by commercial bank lending in multiplied changes in the money supply. The fact is that in a modern monetary economy the monetary base adjusts to the changes in the money supply.
521	The money multiplier is in fact more correctly considered to be a divisor relating the monetary base to the money supply.
983	The money multiplier is in fact more correctly considered to be a divisor relating the monetary base to the money supply.
376	The money multiplier suggests that changes in the monetary base are driven by changes in the money supply
1631	The money supply is often defined to be the sum of currency on issue and demand deposits held in banks. The value of money always declines if the money supply rises.
881	The money supply is often defined to be the sum of currency on issue and demand deposits held in banks. The value of money declines if the money supply rises.
1635	The more funds that commercial banks have on account with the central bank the greater is their capacity to provide loans to customers.
1883	The more funds that commercial banks have on account with the central bank the more they can lend out to customers.
888	The more funds that commercial banks have on account with the central bank the more they can lend to customers.
2032	The more \money\ there is in the economy the lower will be its value.
2152	The more public debt a currency-issuing government voluntarily issues
2141	The more public debt a currency-issuing government voluntarily issues the more difficult it is for banks to attract deposits to initiate loans from.
1543	The more public debt a sovereign government voluntarily issues to match its fiscal deficits
177	The more reserves the commercial banking system has the more likely it is to lend.
1060	The National Accounting framework says that total spending is the sum of household consumption, private investment, government spending and net exports. To understand this in terms of a stock-flow consistent macroeconomics, where we have to always trace the impact of flows during a period on the relevant stocks at the end of the period, we would interpret the spending components as flows adding to the stock of aggregate demand which in turn impacts on the final production (Gross Domestic Product).
345	The National Accounting identity says that total spending is the sum of household consumption, private investment, government spending and net exports. To understand this in terms of a stock-flow consistent macroeconomics, where we have to always trace the impact of flows during a period on the relevant stocks at the end of the period, we would interpret the spending components as flows add to the stock of aggregate demand which in turn impacts on the final production (Gross Domestic Product).
1518	The National Accounts tell us that total spending is the sum of household consumption, private investment, government spending and net exports. To understand this in terms of a stock-flow consistent macroeconomics, where we have to always trace the impact of flows during a period on the relevant stocks at the end of the period, we would interpret the spending components as flows that add to the stock of aggregate demand (spending) which in turn impacts on the final production (Gross Domestic Product) and national income.
892	The neo-liberal era has been characterised by a declining wage share in national income in many nations. This means that the real living standards of worker's has been systematically eroded in these nations.
1638	The neo-liberal era has been characterised by a declining wage share in national income in many nations. This means that the real living standards of workers have been systematically eroded in these nations.
1665	The net financial asset position of the non-government sector is invariant to the decision by government to issue bonds to private dealers to match its deficit spending as against using Overt Monetary Financing.
1283	The net worth of the non government sector rises if the government issues bonds to match its deficit spending.
1789	The net worth of the non-government sector rises immediately as a result of the government issuing bonds to exactly match ($-for-$) the increase in net public spending.
2105	The net worth of the non-government sector would be initially invariant to a decision by government to match or not to match its net public spending with bond issues.
485	The net worth of the non-government sector would not alter if the government issued bonds to exactly match ($-for-$) the increase in net public spending or not.
1435	The new conservative government of Finland claims that domestic deflation (cutting wages and conditions for workers) will spark an export boom and provide the capacity for the government to run primary surpluses without compromising real economic growth. If Finland did actually achieve positive net exports then the government could push for a primary fiscal surplus knowing it will not compromise growth.
826	The non-government sector are wealthier when a government issues bonds by the government to match its budget deficit.
716	The non-government sector does not enjoy an increase in its asset holdings when a sovereign government issues debt.
1592	The non-government sector does not enjoy an increase in its financial asset holdings as a result of its sovereign government issuing debt to match its net spending.
1709	The non-government sector is immediately wealthier if the government issues bonds to match its net spending (relative to not issuing them at all).
2003	The non-government sector is immediately wealthier if the government matches it deficit with new debt issues compared to a situation where no debt was issued.
737	The non-government sector is wealthier when the government issues debt to exactly match ($-for-$) its increase in net public spending.
1206	The non-government sector is wealthier when the government matches it deficit with new debt issues.
566	The non-government sector is wealthier when the government matches it deficit with new debt issues.
1176	The non-government sector net wealth rises when the government issues bonds to exactly match ($-for-$) the increase in the fiscal deficit.
2273	The non-government sector net wealth rises when there are government fiscal deficits, because, under current institutional practices, governments issue bonds to exactly match ($-for-$) their deficits.
813	The OECD has just published their latest analysis of the fiscal situation in the world economy. Their estimates will usually lead one to conclude that a government's discretionary fiscal position is more expansionary than it actually is.
871	The OECD reported this week that the wage share in national income has continued to fall in Australia during the crisis. This has arisen because the purchasing power equivalent of wages and salaries has failed to keep pace with the growth in labour productivity.
1826	The only difference between quantitative easing and a discretionary fiscal injection is which branch of government is responsible for the stimulus.
11	The only essential requirement for a sovereign currency is
1581	The only obvious thing we can conclude when a government records a fiscal surplus is that the government is seeking to attenuate the growth in aggregate spending by withdrawing net spending from the economy.
397	The only time that a budget surplus represents increased national savings is when the government creates a sovereign fund.
2371	The only time that a fiscal surplus represents increased national savings is when the government creates a sovereign fund.
2511	The only time that a fiscal surplus represents increased national savings is when the government creates a sovereign fund.
1506	The only time that fiscal surplus represents increased national savings is when the government creates a sovereign fund.
1857	The only way a nation can reduce its public debt ratio (short of defaulting) is for the government to start running primary fiscal surpluses (that is, when spending net of interest payments is less than taxation revenue).
1972	The only way that unbalanced external accounts across nations (some countries with surpluses and other deficits) can exist is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.
176	The only way that you can have unbalanced external accounts across nations (some countries with surpluses and other deficits) is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.
2008	The only way that you can have unbalanced external accounts across nations (some countries with surpluses and other deficits) is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.
325	The only way that you can have unbalanced external accounts across nations (some countries with surpluses and other deficits) is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.
1374	The operation of the automatic stabilisers built into the fiscal parameters (tax rates, income support etc) always supports growth
199	The paradox of thrift tells us that recessions are inevitable unless the government can persuade households to save less.
289	The payment by the central bank of a positive interest rate on overnight reserves held by the commercial banks means that the former no longer has to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements in place when answering).
1014	The payment of a positive interest return by the central bank on overnight bank reserves does not eliminate the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
1240	The payment of a positive interest return by the central bank on overnight bank reserves does not eliminate the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
1439	The payment of a positive interest return by the central bank on overnight bank reserves does not eliminate the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
1836	The payment of a positive interest return by the central bank on overnight bank reserves does not eliminate the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
849	The payment of a positive interest return by the central bank on overnight bank reserves does not eliminate the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
1705	The payment of a positive interest return by the central bank on overnight bank reserves eliminates the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
608	The payment of a positive interest return by the central bank on overnight bank reserves eliminates the need for it to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).
2360	The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend increase the overall level of reserves held by the latter (ignore any reserve requirements).
369	The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend increase the overall level of reserves held by the latter (ignore any reserve requirements).
290	The payment of a positive return on overnight reserves held by the commercial banks  equal to the current policy rate will tend increase the overall level of reserves held by the latter (ignore any reserve requirements in place when answering).
1670	The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend increase the overall level of reserves held by the latter (ignore any reserve requirements in place when answering).
1185	The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend to increase the volume of broad money in the system (ignore any reserve requirements in place when answering).
1671	The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend to increase the volume of broad money in the system (ignore any reserve requirements in place when answering).
291	The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend to increase the volume of broad money in the system (ignore any reserve requirements in place when answering).
1248	The payment to the private banks on reserves they hold with the central bank reduces their incentive to advance credit to the private sector.
615	The payment to the private banks on reserves they hold with the central bank reduces their incentive to advance credit to the private sector.
355	The policy direction of some EMU nations to resolve their so-called fiscal crisis is to reduce wages and prices in order to restore competitiveness. While harsh this will ultimately improve the competitive position of Greece, Portugal, Ireland and other nations currently in external deficit by increasing aggregate demand via net exports.
466	The population of the North Pole is
1725	The posting of a  fiscal surplus indicates that the national government has sought to reduce aggregate spending in the economy.
1347	The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.
1555	The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.
1600	The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.
2062	The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.
426	The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.
204	The principle of opportunity cost at a macroeconomic level is violated by the existence of mass unemployment.
464	The private and public sectors cannot both reduce their levels of indebtedness if there is an external deficit.
790	The private domestic sector cannot save if a nation's external sector is in balance (and thus making no contribution to real GDP growth) and the government runs a balanced budget.
1649	The private domestic sector cannot save if a nation's external sector is in balance (and thus making no contribution to real GDP growth) and the government runs a balanced fiscal position.
1667	The private domestic sector cannot save if a nation's external sector is in balance (and thus making no contribution to real GDP growth) and the government runs a balanced fiscal position.
1072	The private domestic sector cannot save if the nation's external sector is in balance and the government runs a balanced budget.
335	The private domestic sector can save overall even if the government budget balance is in surplus as long as net exports are positive.
329	The private domestic sector can save overall even if the government deficit is in surplus as long as net exports are positive. But typically with net exports negative, the government has to run deficits to enable to private domestic sector to save overall.
212	The private domestic sector can save overall even if the government deficit is in surplus as long as net exports are positive. This is the Norwegian situation. But typically with net exports negative, the government has to run deficits to enable to private domestic sector to save.
1825	The private domestic sector can save overall even if the government fiscal balance is in surplus as long as net exports are positive.
2005	The private domestic sector can save overall even if the government fiscal balance is in surplus as long as net exports are positive.
2166	The private domestic sector can save overall even if the government fiscal balance is in surplus as long as net exports are positive.
2044	The private domestic sector can save overall, even if the government fiscal balance is in surplus, as long as net exports are positive.
1385	The private domestic sector can save overall even if the government fiscal balance is in surplus as long as the external sector is adding to total demand in the economy.
1301	The private domestic sector can save overall even with a government fiscal surplus as long as net exports are positive.
1247	The private domestic sector of the economy can save overall, as long as the net exports are positive.
180	The private domestic sector overall can never save if there is a current account deficit and the government continually balances its budget.
1419	The private domestic sector will always be spending less than it earns in situations where the government fiscal balance is zero and the nation runs continuous external deficits.
2061	The private domestic sector will always run a deficit (spend more than they earn) exactly equal to the external deficit on average over a complete economic cycle, if the government fiscal position averages out to zero over the same cycle.
404	The private domestic sector will always run a deficit (spend more than they earn) which is exactly equal to the external deficit, if the government balances its budget on average over the business cycle.
2017	The private domestic sector will save overall even if the government fiscal balance is in surplus as long as net exports are positive.
1397	The private domestic sector will save overall even if the government's fiscal balance is in surplus as long as net exports are positive.
2414	The private domestic sector will save overall even with a government fiscal surplus as long as net exports are positive.
1037	The private domestic sector will typically be in deficit when a sovereign national government runs a balanced budget over the business cycle (peak to peak) and the nation runs an external deficit over the same cycle.
675	The private sector is wealthier if the government matches its deficit spending with bond issues relative to if the government just spent without issuing bonds (that is, instructed the central bank to credit bank accounts).
111	The problem in the baby-sitting economy was that the cooperative were running a budget surplus which constrained the number of scrips that were available to exchange for baby-sitting services.
94	The problem with foreigners holding significant public debt is that if they lose confidence and liquidate their debt holdings, the local exchange rate will depreciate sharply.
154	The problem with private home mortgages being written in a foreign currency, is that if the home currency depreciates that home owner can end up with negative equity in their homes in terms of the foreign currency.
59	The projected budget deficit is $58 billion next financial year. It is likely that this injection will be
1208	The public debt ratio is of no concern because economic growth will always bring it down after a recession.
1617	The public debt ratio is of no concern because economic growth will always bring it down after a recession.
747	The public debt ratio is of no concern because economic growth will always bring it down after a recession.
2121	The public debt ratio is of no concern because it falls once economic growth resumes.
520	The public debt ratio is of no concern because it falls once economic growth resumes.
1987	The public debt ratio will always fall when economic growth is positive because the primary deficit falls due to the automatic stabilisers (more tax revenue, less welfare spending) and the denominator GDP rises.
295	The public debt ratio will always fall when economic growth is positive because the primary deficit falls due to the automatic stabilisers (more tax revenue, less welfare spending) and the denominator GDP rises.
2142	The public debt ratio will always fall when economic growth is positive because the primary fiscal deficit falls due to the automatic stabilisers (more tax revenue, less welfare spending), and, the denominator, GDP rises.
727	The published government deficit outcome each year summarises the economic policy stance chosen by government.
225	The Quantity Theory of Money cannot possibly be used to predict the movement in the general price level in an economy that has 10 per cent unemployment because firms do not face any wage pressures.
524	The Quantity Theory of Money considers that growth in the stock of money will be inflationary. The fact that the large-scale quantitative easing (so-called printing money) in many nations in recent years has not generated inflation demonstrates that the mainstream Quantity Theory of Money is incorrect.
897	The rate the central banks charge commercial banks for any reserves it provides to them is dependent on the target policy rate the central bank sets.
756	The ratio of the broad measure of the money supply (M2) to the monetary base has fallen dramatically in the US in recent years. This tells us that the mainstream macroeconomics concept of the money multiplier is false.
872	The ratio of the broad measure of the money supply to the monetary base has fallen dramatically in many nations during the financial crisis which indicates that the money multiplier has fallen.
481	The ratio of the \stock of money\ and bank reserves has fallen dramatically in the US in recent years. This is best understood in terms of the tightly constrained credit markets due to recession.
2016	The ratio of the \stock of money\ (currency plus demand deposits) to bank reserves fell dramatically in the US in 2008 and been variable since that time. This phenomenon is best explained by a variable money multiplier.
531	The ratio of the \stock of money\ (currency plus demand deposits) to bank reserves has fallen dramatically in the US in recent years. This tells us that the money multiplier is not constant.
151	The RBA governor said this week that \ in the long run, monetary policy is about the value of money  that is, prices  [but]  in the short term, monetary policy changes do affect the real economy, because they affect aggregate demand\. This means that the RBA believes that interest rates have no impact on employment or economic growth over the long run.
1233	The real material living standards of workers are systematically eroded when the wage share in national income declines in favour of a higher profit share.
1967	The real purchasing power of workers' wages rises when the rate of growth in nominal earnings is faster than the growth in labour productivity.
1224	The real spending capacity of a currency-issuing government is constrained by the tax revenue it generates.
757	The real spending capacity of a currency-issuing government is constrained by the tax revenue it generates.
1104	The real spending capacity of a sovereign (currency-issuing) government is constrained by the tax revenue it receives.
1629	The real wage can only grow if the rate of growth in earnings outstrips labour productivity growth.
942	The real wage can only grow if the rate of growth in earnings outstrips labour productivity growth.
222	There are millions of idle dollars sitting in bank reserve accounts at present as a result of the so-called central bank liquidity operations. While bank loans create deposits and the banks then add necessary reserves as part of a separate operation, it is clear that the huge stock of idle reserves, currently make it easier for banks to lend if they can find credit-worthy customers.
185	The reason estimates of structural budget deficits are to be treated with suspicion relates to the fact that typically the implicit estimates of potential GDP are too optimistic.
288	The reason estimates of structural budget deficits are to be treated with suspicion relates to the fact that typically the implicit estimates of potential GDP are too optimistic.
1938	The reason estimates of structural fiscal deficits are to be treated with suspicion relates to the fact that typically the associated estimates of potential GDP are too optimistic.
2302	The reason that economy-wide wage cuts will not reduce unemployment relates to the observation that
1532	The reason that IMF and OECD estimates of structural fiscal deficits are to be treated with suspicion relates to the fact that typically the implicit estimates of potential GDP are too optimistic.
2304	The reason that MMT economists favour flexible exchange rates  over the Bretton Woods system of fixed exchange rates is because
422	The recent practice of large-scale quantitative easing (so-called printing money) in many nations and the fact that inflation is benign, strongly refutes the mainstream theory of inflation embodied in the Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.
370	There has been a lot of talk in the Australian federal election campaign about structural budget deficits. These estimates are typically based on overly pessimistic estimates potential GDP and thus should be disregarded.
1657	There is no difference in terms of the government's impact on aggregate demand, between the government matching its deficit spending with bond issues to the non-government sector and the situation where the government instructed the central bank to buy its bonds to match the deficit.
1444	There is no difference in terms of the impact on aggregate demand, between the government matching its deficit spending with bond issues and a situation where the government instructs the central bank to buy its bonds to match the deficit.
819	There is no difference in terms of the impact on aggregate demand, between the government matching its deficit spending with bond issues and the situation where the government instructed the central bank to buy its bonds to match the deficit.
2045	There is talk among central bankers of renewed programs of quantitative easing to fight off fears of recession as a result of the trade tensions. Fiscal stimulus is also being proposed. The two work in different ways but have the same ultimate impact on net worth in the non-government sector.
32	There is talk that the international ratings agencies may reduce the Australian Government's triple A bond rating if the deficit gets too large which may see higher short-term interest rates. If this occurs then we can
175	There is the same risk of a generalised inflation arising from a net exports boom as there is from expanding net public spending.
201	There is worry that the large increase in bank reserves in various countries that have resulted from the fiscal and monetary policy efforts will be lend out and create inflation as the recovery gathers pace. However, the only way that they will be reduced is through a combination of government transactions with the non-government sector including running a budget surplus; issuing public debt; the central bank selling gold or foreign exchange etc.
555	The relentless push by neo-liberals to cut real wages growth has allowed the share of national income going to profits to expand over the last 30 years in many nations.
2279	The relentless push by neo-liberals to cut real wages growth has ensured the share of national income going to profits has expanded over the last 30 years in many nations.
801	The relentless push by neo-liberals to cut real wages growth has ensured the share of national income going to profits has expanded over the last 30 years in many nations.
1644	The relentless push by neo-liberals to suppress real wages growth has ensured the share of national income going to profits has expanded over the last 30 years in many nations.
166	The Reserve Bank of Australia believes that in the long-run the real economy is not influenced by monetary variables (so interest rate rises do not have real effects). This is consistent with Phelps's view that workers' inflation expectations converge on the actual inflation rate, and, at the point, the economy is deemed to be at full employment no matter what the actual unemployment rate happens to be.
221	The Reserve Bank of Australia currently seeks to maintain a policy interest rate of 3.75 per cent as its statement of monetary policy. As a consequence, unless it was prepared to pay the same rate on overnight reserves held with it by the commercial banks, then any government net spending has to be offset with debt-issuance.
24	The rising budget deficit will only become a problem
49	The rising public debt levels that we are seeing will have to be paid back as the debt matures. These payments and the associated interest servicing will
34	The rising unemployment in Australia at present
2199	The role of the automatic stabilisers are to adjust government net spending in a counter-cyclical fashion to ensure that the government fiscal balance will rise during a recession to support the economy and then return to its appropriate level once growth resumes.
179	The saying \Investment brings forth its own saving\ refers to the fact that the non-government sector is not sovereign in the currency and has to finance its spending.
911	The sectoral balances perspective of the national accounting framework tells us that the private domestic sector cannot save if a nation's external sector is in balance and the government runs a balanced budget.
1091	The sectoral balances perspective of the national accounting framework tells us that the private domestic sector cannot save if a nations external sector is in balance and the government runs a balanced budget.
1453	The sectoral balances perspective of the national accounting framework tells us that the private domestic sector cannot save if a nations external sector is in balance and the government runs a balanced fiscal position (government spending equals its revenue).
1369	The share of national income going to profits has expanded over the last 30 years in many nations because employers have successfully suppressed real wages growth.
963	The share of wages in national income has fallen in most nations over the last 30 years. In part, this led to economic growth becoming more dependent on credit to maintain growth in consumption spending and was a primary cause of the global financial crisis. To reduce this dependency, the wage share will have to rise. However, with fiscal austerity now targetting cuts in real wages, the necessary reversal in the wage share decline will be thwarted.
1679	The share of wages in national income in many nations has fallen significantly over the neo-liberal period which signals that the real standard of living for workers has been falling in those countries.
1454	The so-called 'progressives' tend to argue that if austerity is to be imposed it is better to increase taxes (particularly on high income earners). Conversely, 'conservatives' demand spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
1928	The solvency risk facing Eurozone nations such as Italy at present is sourced in the restrictions imposed on fiscal deficit and debt ratios by the Stability and Growth Pact and the Fiscal Compact, which member states voluntarily agreed to when they entered into as part of their membership of the common currency.
1660	The spending by a sovereign government becomes more expensive when the bond markets push yields on new bond issues up.
825	The spending by a sovereign government becomes more expensive when the bond markets push yields on new bond issues up.
1483	The standard of living of workers falls if growth in real wages fails to keep pace with labour productivity growth.
561	The standard of living of workers falls if growth in real wages fails to keep pace with labour productivity growth.
1733	The statement that lending is capital-constrained rather than reserve constrained would not apply if the banks had to maintain a reserve ratio of 100 per cent.
1984	The statement that lending is capital-constrained rather than reserve constrained would not apply if the banks had to maintain a reserve ratio of 100 per cent.
274	The statement that lending is capital-constrained rather than reserve constrained would not apply if the banks had to maintain a reserve ratio of 100 per cent.
787	The stock of government spending continually rises when there are rising budget deficits.
1218	The stock of government spending continually rises when there are rising fiscal deficits.
2452	The stock of government spending continually rises when there are rising fiscal deficits.
391	The stronger is the the demand for public bonds at a government auction
1180	The stronger is the the demand for public bonds at a government auction the lower the yields will be at that asset maturity but this tells us nothing about the effect of fiscal deficits on short-term interest rate
255	The suggestion to create a European Monetary Fund is motivated by the desire to prevent sovereign defaults among member countries who are having trouble covering their net spending positions with market-sourced finance. The solvency risk is however sourced in the restrictions imposed on deficit and debt ratios by the Stability and Growth Pact which member states voluntarily agreed to.
2420	The tax revenue a government receives constrains the real spending capacity of a sovereign government.
1002	The tax revenue a government receives importantly constrains the real spending capacity of a sovereign government.
1480	The tax revenue a government takes in each period has no bearing on the real spending capacity of a sovereign government.
205	The Taylor rule sets interest rates according to the notion that the short-term real interest rate should reflect a mark-up or mark-down on the real natural interest rate. The add or subtract factors are determined by weights on the inflation and output gaps, respectively. Typically the output gap is calculated based on estimates of a natural rate of unemployment with determines the potential output level. If the natural rate of unemployment is above the true full employment level of unemployment, then the Taylor rule will always lead to deflationary monetary policy settings even when the central bank considers it is conducting a neutral policy stance.
2049	The term \beggar-my-neighbour\ strategy describes a situation where a nation pushes its excess supply onto its trading partners is more applicable to Germany than China in the current situation.
261	The term \beggar-my-neighbour\ strategy describes a situation where a nation pushes its excess supply onto its trading partners is more applicable to Germany than China in the current situation.
1276	The total stock of public debt as a percentage of Gross Domestic Product (the so-called public debt ratio) is of no concern because it falls once economic growth resumes.
953	The Troika has placed a lot of reliance on nations such as Greece exporting their way out of crisis on the back of extensive cuts to domestic spending as they push their budgets into surplus. This strategy can only be associated with real economic growth if the private domestic sector spends more than it earns.
1680	The Troika's strategy for Greece is that domestic deflation will spark an export boom and provide the capacity for the government to run primary surpluses without compromising real economic growth. Assuming Greece actually sustained positive net exports then the government could maintain a primary fiscal surplus knowing it will not compromise growth.
1394	The Troika wants Greece to stimulate economic growth by restoring export competitiveness through domestic deflation (reducing domestic wages and prices relative to other nations). However, Greece's export competitiveness may still fall no matter how much it deflates.
2495	The unemployed on income support benefits live off the hard work of those who pay taxes.
131	The unemployment rate will remain stable if the sum of public and private employment growth is equal to the growth in the labour force.
965	The US Bureau of Labor Statistics just released the October 2012 Consumer Price Index data which showed a declining inflation rate in America. Mainstream economists have argued that the large scale quantitative easing conducted by central banks in recent years - so-called printing money - would be inflationary. They base their predictions on the Quantity Theory of Money which in common parlance is expressed as too much money chasing too few goods. The fact that inflation is in retreat in the US despite the Federal Reserve having engaged in large-scale quantitative easing programs refutes the mainstream economic theory of inflation.
687	The US economy is projected to grow in real terms by around 1.5 per cent in 2011. At present the Conference Board expects real GDP per employed person to grow by 1.1 per cent over the same period and there is also the expectation that average weekly hours worked will remain more or less constant in 2011. Which of the following labour force growth rates would provide the basis for an expectation that the unemployment rate will be lower at the end of 2011 than at the beginning?
456	The use of a budget surplus to create a sovereign fund provides the government with more spending options in the future.
2089	The use of a fiscal surplus to create a sovereign fund provides a currency-issuing government with greater spending capacity in the future.
514	The US federal government can run a balanced budget over the business cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
622	The US Federal Reserve could easily directly purchase Treasury debt to facilitate the US Governments budget deficit without compromising its monetary policy settings because its short-term policy rate is already near zero.
116	The US Federal Reserve is about to take over the New York Times and use its printing press to print more government bonds.
590	The US Federal Reserve's quantitative easing program ends this month. Most commentators agree it has not provided much stimulus. This reason for the lack of stimulus is because aggregate demand has not shown a sensitivity to interest rate reductions.
558	The US Federal Reserve this week put out its updated projections which provide \central tendency\ estimates of real GDP growth between 3.5 and 4.3 per cent in 2013. Their lowest estimate for 2013 was 3 per cent per annum. Assuming the current labour productivity growth continues (around 2 per cent per annum) and the labour force growth resumes more normal rates (around 1.4 per cent per annum) by 2013 and the average working week is constant in hours, then one consequence of the difference between the lower bound of the central tendency projections and their lowest estimate will be that the unemployment rate will fall more slowly in 2013 if the the latter projection is true.
95	The US government could stimulate bank lending by imposing a tax on excess reserves held by the banks at the central bank.
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
9	The US government's latest plan (the Public-Private Investment Program) will
254	The US Senate has recently debated whether to extend unemployment benefits given the lack of job opportunities currently available. One side of the debate says the proposal will reduce growth because it reduces the incentive to search for work although the evidence for this impact is weak. The other side of the debate says the proposal will maintain and perhaps stimulate growth because it will maintain spending capacity of those without work. Even if the former effect was strong, the proposal would not harm growth at present.
1867	The value of money inevitably declines if the money supply rises.
1455	The wage share in national income has continued to fall in Australia in the last several years because the growth in nominal wages and salaries has failed to keep pace with the growth in labour productivity.
2225	The wage share in national income in Australia fell below 50 per cent in the June-quarter 2020. This means that the real wage fell.
572	The wage share in national income in many nations has fallen over the neo-liberal period. A declining wage share does not mean the real standard of living for workers is falling.
1569	The wage share in national income in many nations has fallen over the neo-liberal period. However, a declining wage share does not mean the real standard of living for workers is falling.
655	The wage share in national income in many nations has fallen over the neo-liberal period which means that workers' real living standards are being eroded in those countries.
808	The wage share in national income in many nations has fallen significantly over the neo-liberal period which signals that the real standard of living for workers has been falling.
1070	The wider the spread between the price the central bank sets on the reserves it provides the commercial banks on demand (so-called penalty rates) and the target policy rate the more difficult it becomes for the central bank to ensure the quantity of reserves is appropriate for maintaining its target policy rate.
2030	The wider the spread between the price the central bank sets on the reserves it provides the commercial banks on demand (so-called penalty rates) and the target policy rate the more difficult it becomes for the central bank to ensure the quantity of reserves is appropriate for maintaining its target policy rate.
486	The wider the spread between the price the central bank sets on the reserves it provides the commercial banks on demand (so-called penalty rates) and the target policy rate the more difficult it becomes for the central bank to ensure the quantity of reserves is appropriate for maintaining its target policy rate.
2106	The wider the spread between the price the central bank sets on the reserves it provides the commercial banks on demand (so-called penalty rates) and the target policy rate, the more difficult it becomes for the central bank to ensure the quantity of reserves is appropriate for maintaining its target policy rate.
405	This is the premium question for this week: Consumption adds to aggregate demand and imports drain aggregate demand. The marginal propensity to consume (MPC) is conceptually the extra consumption that is induced for every extra dollar of national income. The marginal propensity to import (MPM) is similarly the extra spending on imports that is induced for every extra dollar of national income. If the MPC and MPM both rise by 0.1 then the impact on aggregate demand for every new dollar of national income generated will be neutral.
410	This is the premium question for this week: In Year 1, the economy plunges into recession with nominal GDP growth falling to minus -1 per cent. The inflation rate is subdued at 1 per cent per annum. The outstanding public debt is equal to the value of the nominal GDP and the nominal interest rate is equal to 1 per cent (and this is the rate the government pays on all outstanding debt). The government's budget balance net of interest payments goes into deficit equivalent to 1 per cent of GDP and the debt ratio rises by 3 per cent. In Year 2, the government stimulates the economy and pushes the primary budget deficit out to 2 per cent of GDP and in doing so stimulates aggregate demand and the economy records a 4 per cent nominal GDP growth rate. All other parameters are unchanged in Year 2. Under these circumstances, the public debt ratio will rise but by an amount less than the rise in the budget deficit because of the real growth in the economy.
1356	This week, a ratings agency downgraded Greek government debt because the nation faces insolvency risk. If Greece left the Eurozone and re-established its own currency, converted all euro liabilities to their own currency, they would eliminate that risk on all future liabilities.
2247	This week's Australian National Accounts data saw the wage share fall further to 49 per cent, a record low. If workers cannot maintain nominal wages growth equal to the growth in labour productivity, then their real wages fall.
1175	This week the Australian Bureau of Statistics released data showing that nominal wages growth in Australia over the last 12 months was 2.6 per cent. Over the same period, the annual inflation rate has been 2.7 per cent. As a result of this information we can conclude that there has been a redistribution of national income to profits because the real wage has fallen.
1266	This week the OECD revised its real GDP growth forecasts for the Euro area and now expects it to grow by 0.8 per cent in 2014 and 1.1 per cent in 2015. They also predicted that the Euro area unemployment rate would fall from 11.7 per cent in 2014 to 11.4 per cent in 2015. Additionally, they suggested that average annual growth in labour productivity was running at just over 1 per cent per annum (GDP per hours worked). If average weekly hours worked remains constant over 2015, then the implication of the OECD forecasts is that they think the Euro area labour force will
1441	To ensure that the financial system is stable, the central bank allows the money supply to be driven by the monetary base.
1677	To ensure that the financial system is stable, the central bank has to allow movements in the money supply to be driven by the movements in the monetary base.
1659	To ensure that the financial system is stable, the central bank has to allow the money supply to be driven by the monetary base.
2292	To ensure that the financial system is stable, the central bank has to allow the money supply to be driven by the monetary base.
824	To ensure that the financial system is stable, the central bank has to allow the money supply to be driven by the monetary base.
1011	To maintain financial stability, the monetary base has to be driven by changes in the money supply.
1732	To maintain financial stability, the monetary base has to be driven by changes in the money supply.
2431	To maintain financial stability, the monetary base has to be driven by changes in the money supply.
1376	To maintain financial stability, the monetary base has to be driven by changes in the money supply just as the money multiplier in mainstream macroeconomics textbooks explains.
1759	To maintain financial stability, the monetary base has to be driven by changes in the money supply just as the money multiplier in mainstream macroeconomics textbooks explains.
2082	To maintain financial stability, the monetary base has to be driven by changes in the money supply just as the money multiplier in mainstream macroeconomics textbooks explains.
703	To maintain financial stability, the monetary base has to be driven by changes in the money supply just as the money multiplier in mainstream macroeconomics textbooks explains.
1726	To redistribute national income back to workers from capital, wages have to grow faster than the inflation rate.
682	To redistribute national income back to workers, nominal wages have to grow faster than inflation.
638	To reduce the public debt ratio, the government has to eventually run primary budget surpluses (that is, spend less than they raise in taxes).
1702	To reduce the public debt ratio, the government has to eventually run primary fiscal surpluses.
2189	To reduce the public debt ratio, the government has to eventually run primary fiscal surpluses (that is, spend less than they raise in taxes net of interest payments on past debt).
935	To reduce trade deficits, Eurozone nations are seeking to restore export competitiveness (within the Eurozone) by domestic deflation (reducing domestic wages and prices relative to other nations). Export competitiveness will rise if they are successful with this strategy.
788	To reduce trade deficits, Eurozone nations are seeking to restore export competitiveness (within the Eurozone) by domestic deflation (reducing domestic wages and prices relative to other nations) given they do not have a flexible exchange rate. Export competitiveness will rise if they are successful with this strategy.
678	To reduce trade deficits, Eurozone nations are seeking to restore export competitiveness (within the Eurozone) by domestic deflation (reducing domestic wages and prices relative to other nations) given they do not have a flexible exchange rate. However, export competitiveness may still fall no matter how much some nations deflate.
705	Trade unions can cause mass unemployment by forcing firms to accede to wage demands that outstrip the inflation rate.
1402	Trade unions can ensure that workers gain a greater share of national income if they attain aggregate wages growth greater than the inflation rate.
1450	Trade unions that manage to push aggregate wages growth ahead of the inflation rate will ensure that workers gain a greater share of national income.
1829	Trade unions that manage to push aggregate wages growth ahead of the inflation rate will ensure that workers gain a greater share of national income.
706	Trade unions that manage to push aggregate wages growth ahead of the inflation rate will ensure that workers gain a greater share of national income.
15	Trade unions who advocate shorter hours (work sharing) as a national solution to rising unemployment
55	Under a fiat monetary system, the absence of convertibility means
1038	Under a fiat monetary system, the absence of currency convertibility means
1334	Under a fiat monetary system, the absence of currency convertibility means
311	Under a fiat monetary system, the absence of currency convertibility means
388	Under a fiat monetary system, the absence of currency convertibility means
1513	Under a fiat monetary system, the absence of currency convertibility means that
1686	Under a fiat monetary system, the absence of currency convertibility means that
1895	Under a fiat monetary system, the absence of currency convertibility means that
194	Under certain conditions, increasing bank credit can be inflationary. In this regard, as the world economy improves, the central bank will eventually need to reduce the reserves in the banking system to constrain the ability of banks to lend.
1040	Under current arrangements, where sovereign governments match their deficits with issues of debt to the private sector, it is possible for the government and the private domestic sectors to simultaneously run surpluses.
501	Under current institutional arrangements, a central bank can easily purchase treasury debt directly to satisfy accounting arrangements relating to the national governments budget deficit (that is, \monetise the deficit\) while still targeting a positive short-term policy rate.
1489	Under current institutional arrangements, a central bank can easily purchase treasury debt directly to satisfy accounting arrangements relating to the national governments fiscal deficit (that is, monetise the deficit) while still targeting a positive short-term policy rate.
511	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the difference between government spending and tax revenue (the \primary deficit\) plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP.
294	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP.
469	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP.
373	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions.
698	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions.
975	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions.
1242	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions conducted by the central bank.
438	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions conducted by the central bank.
766	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions conducted by the central bank.
1047	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP plus the changes in the monetary base arising from official foreign exchange transactions.
1358	Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary fiscal deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions.
1654	Under current institutional arrangements (where deficits are matched $-for-$ by debt-issuance), the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions.
815	Under current institutional arrangements (where deficits are matched $-for-$ by debt-issuance), the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP minus the changes in the monetary base arising from official foreign exchange transactions.
1123	Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sector cannot simultaneously spend less than they earn.
1457	Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sector cannot simultaneously spend less than they earn.
2226	Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sector cannot simultaneously spend less than they earn.
875	Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sector cannot simultaneously spend less than they earn.
1225	Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sectors can simultaneously reduce their debt levels.
759	Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sectors can simultaneously reduce their debt levels.
134	Under current US legal arrangements, the willingness of the Chinese to purchase US government bonds has allowed the US government to run bigger deficits than they might have.
54	Under the gold standard, a country with a chronic balance of payments deficit would face
2280	Unemployment can still rise when employment growth keeps pace with labour force growth.
804	Unemployment can still rise when employment growth keeps pace with labour force growth.
1015	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
1692	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
2164	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
710	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
837	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
1799	Unlike a household, which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
2294	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
2432	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency can always roll over its \own currency\ debt obligations and never has to pay them back.
1378	Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency, can always roll over its \own currency\ debt obligations and never has to pay them back.
1129	Using national accounting rules which dictate that the government balance is always equal to the non-government balance with an opposite sign, we can conclude that if the public sector successfully achieves a budget surplus then the private sector must be spending more than it is earning (that is, running a deficit).
2235	Using national accounting rules which dictate that the government balance is always equal to the non-government balance with an opposite sign, we can conclude that if the public sector successfully achieves a fiscal surplus then the private domestic sector must be spending more than it is earning.
2379	Using national accounting rules which dictate that the government balance is always equal to the non-government balance with an opposite sign, we can conclude that if the public sector successfully achieves a fiscal surplus then the private sector must be spending more than it is earning (that is, running a deficit).
588	Various governments are imposing austerity budgets on their economies. In Britain and the US, even \progressives\are supporting cutting net spending but prefer to focus on tax increases while the \conservatives\ are recommending spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
1579	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, until we know the relative magnitudes of these balances, we are unable to conclude the state of the fiscal balance.
1664	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, until we know the relative magnitudes of these balances, we are unable to conclude the state of the fiscal balance.
1822	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, until we know the relative magnitudes of these balances, we are unable to conclude the state of the fiscal balance.
2450	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, until we know the relative magnitudes of these balances, we are unable to conclude the state of the fiscal balance.
785	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, until we know the relative magnitudes of these balances, we are unable to conclude the state of the fiscal balance.
674	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, we cannot tell what the government budget balance will be as a percentage of GDP until we know the relative magnitudes of the other two balances.
1392	We are told that a country is running a small current account deficit and that the private domestic sector is saving overall. However, we cannot tell what the government fiscal balance will be (deficit or surplus) until we know the relative magnitudes of the other two balances.
1066	We are told that a country is running a very small external deficit and that the private domestic sector is spending less overall than it is earning but relative to GDP this balance is smaller than the external deficit. Without knowing the relative magnitudes of these balances, we cannot conclusively determine whether the government is in deficit or surplus.
1380	We are told that a country is running a very small external deficit and that the private domestic sector is spending less overall than it is earning but relative to GDP this balance is smaller than the external deficit. Without knowing the relative magnitudes of these balances, we cannot conclusively determine whether the government is in deficit or surplus.
2425	We know that Santa has rejected the anti-vaxxer message.
721	We would never observe a nation running a current account deficit and budget surplus equal to 2 per cent of GDP, while the private domestic sector was spending more than it is earning.
1809	We would never observe a state where a nation was running an external deficit (trade and income flows), a fiscal surplus and the private domestic sector was spending less than it was generating.
1353	What conservatives fail to understand is the public debt to GDP ratio always falls once economic growth resumes.
719	What the fiscal austerity proponents do not understand, is that once economic growth resumes the automatic stabilisers built into the budget always work counter-cyclically and reduce the budget balance to its appropriate level.
2458	When 10-year government bond yields rise you know that bond markets are demanding increased risk coverage for these assets.
2464	When 10-year government bond yields rise you know that bond markets are demanding increased risk coverage for these assets.
2321	When 10-year government bond yields rise you now that bond markets are demanding increased risk coverage for these assets.
228	When a country is running an external deficit and the national currency issuing government achieves a balanced budget averaged from peak to peak of the business cycle, the private domestic sector will be
738	When a country runs an external surplus, the national government can safely run a budget surplus without impeding economic growth.
1387	When a country runs an external surplus, the national government can safely run a fiscal surplus without impeding economic growth.
829	When a country runs a small current account deficit and the private domestic sector is saving overall, the government budget balance will always be in deficit.
1710	When a country runs a small current account deficit and the private domestic sector is saving overall, the government cannot run a surplus.
1426	When a country runs a small current account deficit and the private domestic sector is saving overall, the government fiscal balance will always be in deficit.
2170	When a country runs a small current account deficit and the private domestic sector is saving overall, the government fiscal balance will always be in deficit.
587	When a country runs a small current account deficit and the private sector is saving overall, the government budget balance will always be in deficit.
877	When a currency appreciates strongly against key trading partner currencies due to the strong demand for certain exports (say mining output), the result drop in international competitiveness squeezes export industries which are not enjoying a commensurate growth in world demand. Cutting domestic wages and the rate of inflation would restore competitiveness in the industries that are under pressure.
2486	When a currency-issuing government voluntarily constrains itself ensure any fiscal deficits are matched by borrowing from the private sector, it reduces the funds available for private investment expenditure.
1510	When a currency-issuing government voluntarily constrains itself to borrow from the non-government sector to cover its fiscal deficit, it substitutes its spending for the borrowed funds and reduces the private capacity to borrow and spend.
1187	When a currency-issuing government voluntarily constrains itself to borrow from the private sector to cover its deficit spending, it logically reduces the funds available for private investment expenditure.
2205	When a currency-issuing government voluntarily constrains itself to borrow from the private sector to cover its deficit spending, it logically reduces the funds available for private investment expenditure.
1286	When a currency-issuing government voluntarily constrains itself to borrow from the private sector to cover its net spending (deficits) position, it substitutes public spending for the borrowed private funds and reduces the funds available for private sector borrowing.
548	When a currency-issuing government voluntarily constrains itself to borrow from the private sector to cover its net spending (deficits) position, it substitutes public spending for the borrowed private funds which reduces the funds available for private sector borrowing.
565	When a government issues debt it creates more non-inflationary space for itself to spend than if it spent without issuing debt.
1565	When a government issues debt to the non-government sector it creates more non-inflationary space for itself to spend than if it spent without issuing the debt.
1031	When a government records a budget surplus which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand.
789	When a government records a budget surplus which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand.
934	When a government records a budget surplus which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand.
1068	When a government records a budget surplus which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand to avoid the risk of inflation.
1219	When a government records a budget surplus which means it is withdrawing net purchasing power from the economy and reducing the economic growth rate of the economy, we cannot conclude that it has adopted a policy of austerity.
1307	When a government records a fiscal surplus, which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand.
1382	When a government records a fiscal surplus, which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand to avoid the risk of inflation.
1824	When a government records a fiscal surplus, which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate spending.
1005	When a government runs a continuous budget deficit public spending builds up over time.
538	When a government runs a continuous budget deficit public spending builds up over time and eventually exposes the economy to inflation risk.
1155	When a government runs a continuous deficit (spending more than they are receiving in revenue), the risk is that the accumulated public spending will build up over time and cause inflation.
2256	When a government runs a continuous deficit (spending more than they are receiving in revenue), the risk is that the accumulated public spending will build up over time and cause inflation.
2553	When a government runs a continuous deficit (spending more than they are receiving in revenue), the risk is that the accumulated public spending will build up over time and cause inflation.
2428	When a government runs a continuous fiscal deficit public spending builds up over time.
1313	When a government runs a continuous fiscal deficit, public spending builds up over time.
1941	When a government runs a continuous fiscal deficit, public spending builds up over time.
2162	When a government runs a continuous fiscal deficit public spending builds up over time and eventually exposes the economy to inflation risk.
1373	When a government runs a continuous fiscal deficit, the public spending builds up over time and may eventually exposes the economy to inflation risk.
2288	When a government's fiscal deficit rises we can conclude that it is pursuing an expansionary fiscal policy.
1951	When a government such as the US government voluntarily constrains itself by issuing debt to match $-for-$ its net spending position (deficit), it reduces the funds available to the non-government sector for their own spending.
494	When a government such as the US government voluntarily constrains itself by issuing debt to match $-for-$ its net spending position (deficit), it reduces the funds available to the private sector for their own spending.
2377	When a government such as the US government voluntarily constrains itself to borrow to cover its net spending position, it substitutes its spending for the borrowed funds and logically reduces the non-government capacity to spend.
1907	When a government such as the US government voluntarily constrains itself to borrow to cover its net spending position, it substitutes its spending for the borrowed funds and logically reduces the private capacity to borrow and spend.
407	When a government such as the US government voluntarily constrains itself to borrow to cover its net spending position, it substitutes its spending for the borrowed funds and logically reduces the private capacity to borrow and spend.
1159	When a government such as the US or Australian government voluntarily constrains itself by issuing debt to the private sector to match its net spending position (deficit), it reduces the funds available for private spending.
2104	When a government such as the US or Australian government voluntarily constrains itself by issuing debt to the private sector to match its net spending position (deficit), it reduces the funds available for private spending.
2262	When a government such as the US or Australian government voluntarily decides to issue debt to the private sector to match its net spending position (deficit), it soaks up funds and restricts the capacity for private investment projects.
2111	When a national government announces its fiscal balance has moved into surplus:\n\nit is a sign that the government is trying to constrain economic activity.\nit is a sign that the government is worried that inflation is rising.\nyou cannot conclude anything about the government's policy intentions.\nOptions (a) and (b).
1363	When a national government borrows from the private sector it drains funds out of the system and reduces the risk that public spending will overheat the economy.
1045	When a nation is enjoying a strong terms of trade with an external surplus, the government can create more space for non-inflationary spending in the future by running budget surpluses and accumulating them in a sovereign fund.
695	When a nation is enjoying a strong terms of trade with an external surplus, the government can create more space for non-inflationary spending in the future by running budget surpluses and accumulating them in a sovereign fund.
1755	When a nation is enjoying a strong terms of trade with an external surplus, the government can create more space for non-inflationary spending in the future by running fiscal surpluses and accumulating them in a sovereign fund.
812	When a nation is generating large external surpluses, it can create more space for non-inflationary spending in the future if the government runs budget surpluses and accumulates them in a sovereign fund.
1652	When a nation is generating large external surpluses, it can create more space for non-inflationary spending in the future if the government runs fiscal surpluses and accumulates them in a sovereign fund.
2284	When a nation is generating large external surpluses, it can create more space for non-inflationary spending in the future if the government runs fiscal surpluses and accumulates them in a sovereign fund.
1642	When a nation is running a small current account deficit (close to balance), the government's fiscal balance will always be in deficit when the domestic private sector is spending less than it earns.
894	When a nation runs a budget surplus it indicates that the national government is trying to slow the economy down and contain inflation.
1731	When a nation runs a current account deficit accompanied by a government sector surplus (of equal proportion to GDP as the external deficit), we know that the private domestic sector will be spending less than they are earning.
1602	When a nation's currency appreciates strongly its international competitiveness falls. In these situations, the only way to restore that competitiveness is to reduce the rate of growth in domestic wages and prices relative to our trading partners.
2317	When a nations exchange rate appreciates, the debt servicing payments for debt denominated in a foreign currency
2316	When a nations exchange rate depreciates
1856	When a nation's fiscal deficit is declining it tells us that the government has fallen into an austerity mindset.
709	When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors can spend less than they receive, irrespective of the GDP growth rate.
2163	When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) ends up spending less than they receive, irrespective of the GDP growth rate.
1691	When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) end up spending less than they receive, irrespective of the GDP growth rate.
2293	When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) end up spending less than they receive, irrespective of the GDP growth rate.
836	When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) end up spending less than they receive, irrespective of the GDP growth rate.
1798	When an economy is running a current account deficit, only one of the two remaining sectors (government or private domestic) can be in surplus, irrespective of the GDP growth rate.
1377	When an economy is running an external deficit, national income movements will ensure that only one of the two remaining sectors can spend less than they receive, irrespective of the GDP growth rate.
1108	When an external deficit and public deficit coincide, the private sector is in balance (spending is equal to income).
1845	When an external deficit and public deficit coincide, there must be a private sector deficit.
2149	When an external deficit and public deficit coincide, there must be a private sector deficit, given the sectoral balances framework.
1054	When an external deficit and public deficit coincide, there must be a private sector deficit. This suggests that governments can only run budget deficits safely to support a private sector surplus, when net exports are strong.
1179	When an external deficit and public deficit coincide, there must be a private sector deficit. This suggests that governments can only run budget deficits safely to support a private sector surplus, when net exports are strong.
394	When an external deficit and public deficit coincide, there must be a private sector deficit. This suggests that governments can only run budget deficits safely to support a private sector surplus, when net exports are strong.
318	When an external deficit and public deficit coincide, there must be a private sector deficit, which means that governments can only really run budget deficits safely to support a private sector surplus, when net exports are strong.
1544	When an external deficit and public deficit coincide, there must be a private sector deficit, which means that governments can only really run fiscal deficits safely to support a private sector surplus, when net exports are strong.
1998	When an external deficit and public deficit coincide, there must be a private sector deficit, which means that governments can only really run fiscal deficits to support a private sector surplus, when net exports are strong.
124	When an external deficit (X  M < 0) and public deficit (G - T > 0) coincide, there must be a private sector deficit, which means that governments can only really run budget deficits safely to support a private sector surplus, when net exports are strong.
137	When a person repays a bank loan using actual cash the bank extinguishes the loan (reduces asset) but there is no liability adjustment because the payment did not come from the person running down a deposit account (a liability to the bank). So given the cash doesn't get destroyed by the bank this transaction creates a change in the net financial asset position within the non-government sector.
2463	When a sovereign government issues debt it has no immediate impact on the overall holdings of financial assets held by the non-government sector.
2320	When a sovereign government issues debt it has no impact on the overall holdings of assets held by the non-government sector.
541	When a sovereign government issues debt it has no impact on the overall holdings of assets held by the non-government sector.
1270	When a sovereign government issues debt it has no impact on the overall holdings of financial assets held by the non-government sector.
1333	When a sovereign government issues debt it logically
1514	When a sovereign government issues debt it logically
1586	When a sovereign government issues debt it logically
1606	When a sovereign government issues debt it logically
1992	When a sovereign government issues debt it logically
2036	When a sovereign government issues debt it logically
2072	When a sovereign government issues debt it logically
2365	When a sovereign government issues debt it logically
2505	When a sovereign government issues debt it logically
312	When a sovereign government issues debt it logically
389	When a sovereign government issues debt it logically
453	When a sovereign government issues debt it logically
491	When a sovereign government issues debt it logically
2087	When a sovereign government issues debt it logically increases the financial assets that are held by the non-government sector $-for-$.
649	When a sovereign government issues debt the overall holdings of financial assets held by the non-government sector $-for-$ does not change.
2457	When a sovereign government issues debt to match its fiscal deficit it has no impact on the overall holdings of financial assets held by the non-government sector.
1736	When a sovereign government issues debt to match its fiscal deficit the debt adds to the financial wealth of the non-government sector.
1192	When a sovereign government issues debt to match its fiscal deficit, the financial wealth of the non-government increases.
1050	When a sovereign government issues debt to match its net spending (budget deficit) it logically
193	When bank reserves overall are in excess of the minimum requirements determined by the banks, the commercial banks can profitably eliminate the excess by lending between themselves on the interbank market although this behaviour will drive the overnight interest rate down.
2171	When discussing cuts to discretionary national fiscal positions, progressive voices typically support imposing tax increases while conservatives recommend spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
377	When economic growth resumes the automatic stabilisers work in a counter-cyclical fashion and ensure that the government budget balance returns to its appropriate level.
470	When economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government budget balance returns to its appropriate level.
1611	When economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government fiscal balance returns to its appropriate level.
1048	When economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government budget balance returns to its appropriate level.
2361	When economic growth resumes, the automatic stabilisers work to reduce government spending and increase taxes, which ensures that the government fiscal balance returns to its appropriate level.
2501	When economic growth resumes, the automatic stabilisers work to reduce government spending and increase taxes, which ensures that the government fiscal balance returns to its appropriate level.
1653	Whenever organisations such as the OECD or the IMF publish their latest analysis of the fiscal situation of a particular nation, you can typically conclude that the stated discretionary fiscal position for the government in question is more expansionary than it actually is.
1326	Whenever there is an external sector deficit, which is draining overall spending in the domestic economy, the private domestic sector (households and firms) can only save overall if the government sector runs a deficit or balances its fiscal position.
1294	When government bond yields for new issues start to rise, government spending becomes more expensive.
1471	When government bond yields for new issues start to rise, government spending becomes more expensive.
2439	When government bond yields for new issues start to rise, government spending becomes more expensive.
776	When government bond yields for new issues start to rise, government spending becomes more expensive.
754	When net exports are negative, government deficits are required if private households are to save overall.
2128	When net exports are negative, government deficits will be required if the private domestic sector is to save overall.
528	When net exports are negative, government deficits will be required if the private domestic sector is to save overall.
2285	When output gaps are based on the concept of the NAIRU (Non-Accelerating-Inflation-Rate-of-Unemployment), the estimates produced will usually lead one to conclude that a government's discretionary fiscal position is more expansionary than it actually is.
1746	When private households increase their saving ratios (from disposable income) and firms decline to invest more to cover the loss of consumption, the only option available to avoid overall employment losses, is for the government to expand public deficits.
65	When the Australian government issues debt it logically
45	When the budget balance moves into deficit
2167	When the central bank purchases government bonds in the secondary bond market, it has the equivalent impact on financial assets in the non-government sector as if a fiscal deficit, which increased reserves by the same amount would have.
681	When the external sector is contributing to growth, the government can safely pursue a surplus even if private domestic sector desires to spend less than they earn.
184	When the German constitutional requirement that the federal budget be balanced at all times comes into force, fiscal policy will become pro-cyclical and destabilising.
1997	When the government borrows from the non-government sector it eventually has to pay the bonds back on maturity. This will
19	When the government borrows from the non-government sector it eventually has to pay the bonds back on maturity. This will
317	When the government borrows from the non-government sector it eventually has to pay the bonds back on maturity. This will
2148	When the government borrows from the non-government sector it eventually has to pay the bonds back on maturity. This will not be inflationary because the sovereign government just has to credit the bank accounts of those who hold the bonds to repay them.
1553	When the government borrows from the non-government sector to match an increase in net public spending (deficit increase), the resulting increase in aggregate spending is less than would be the case if there was no bond sale.
2368	When the government borrows from the non-government sector to match an increase in net public spending, the initial increase in aggregate demand is less than would be the case if there was no bond sale.
2508	When the government borrows from the non-government sector to match an increase in net public spending, the initial increase in aggregate demand is less than would be the case if there was no bond sale.
1595	When the government borrows from the private sector to match an increase in net public spending (deficit), the resulting increase in aggregate spending is less than would be the case if there was no bond sale.
1212	When the government borrows from the private sector to match an increase in net public spending (its deficit), the resulting increase in aggregate demand coming from the deficit spending is less than would be the case if there was no bond sale because the private sector has less money to spend.
417	When the government borrows from the private sector to match an increase in net public spending, the resulting increase in aggregate demand is less than would be the case if there was no bond sale.
1029	When the government issues debt to match its budget deficit $-for-$ (or whatever currency unit is relevant) it also increases the net worth of the non-government sector.
1365	When the government matches a deficit by issuing debt to the private sector this is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
1719	When the government matches an increase in deficit spending with debt issued to the private sector, the growth in aggregate demand is less than would be the case if the government didn't borrow.
640	When the government matches an increase in deficit spending with debt issued to the private sector, the growth in aggregate demand is less than would be the case if the government didn't borrow.
1473	When the government matches an increase in deficit spending with debt issued to the private sector, the growth in aggregate demand is less than would be the case if the government didn't borrow at all.
1880	When the government matches an increase in its deficit spending with debt issued to the non-government sector, the immediate stimulus to aggregate expenditure is less than would be the case if the government didn't borrow at all.
635	When the government matches it deficit with new debt issues the non-government sector wealth rises.
1309	When the government matches its deficit with debt-issuance it changes the portfolio of wealth held in the non-government sector and the impact on purchasing power is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
1089	When the government matches its deficit with debt-issuance it changes the portfolio of wealth held in the non-government sector. The impact on purchasing power is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
1221	When the government matches its deficit with debt-issuance it changes the portfolio of wealth held in the non-government sector. The impact on purchasing power is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
1783	When the government matches its deficit with debt-issuance it changes the portfolio of wealth held in the non-government sector. The impact on purchasing power is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
2409	When the government matches its deficit with debt-issuance it changes the portfolio of wealth held in the non-government sector. The impact on purchasing power is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
993	When the government matches its deficit with debt-issuance it changes the portfolio of wealth held in the non-government sector. The impact on purchasing power is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
852	When the government matches its deficit with debt-issuance which drains private sector purchasing power this is equivalent to a leakage from the expenditure system (akin to taxation, saving or imports) which reduces the expansionary impact of the government deficit spending.
1056	When the government pays back funds that is has borrowed from the non-government sector the payments may
393	When the government pays back funds that is has borrowed from the non-government sector the payments may
163	When the government repays debt it drives the interest rate down.
1585	When the IMF and the OECD talk about structural fiscal deficits, you know their estimates are
334	When the national government's budget balance moves into deficit
408	When the national government's budget balance moves into deficit
1908	When the national government's budget balance moves into deficit, we know that the government is trying to stimulate the economy.
495	When the national government's budget balance moves into surplus
2013	When the national government's fiscal balance moves into deficit
2330	When the national government's fiscal balance moves into deficit
2470	When the national government's fiscal balance moves into deficit
1505	When the national government's fiscal balance moves into surplus
1952	When the national government's fiscal balance moves into surplus
1178	When the private domestic sector decides to increase the surplus of its income over spending we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
1055	When the private domestic sector decides to lift its saving ratio we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
395	When the private domestic sector decides to lift its saving ratio we cannot conclude that the national government has to increase its net spending (deficit) to avoid employment losses.
843	When the private domestic sector decides to save more of its total income, the national government has to increase its net spending (deficit) to avoid output and employment losses.
968	When the private domestic sector decides to save more of its total income, the national government has to increase its net spending (deficit) to avoid output and employment losses.
2456	When there is an external deficit, the private domestic sector can reduce its overall indebtedness as long as the government runs a fiscal deficit.
2462	When there is an external deficit, the private domestic sector can reduce its overall indebtedness as long as the government supports saving by running a deficit.
1269	When there is an external deficit, the private sector can reduce its overall indebtedness as long as the government supports private saving by running a deficit.
2319	When there is an external deficit, the private sector can reduce its overall indebtedness as long as the government supports saving by running a deficit.
539	When there is an external deficit, the private sector can reduce its overall indebtedness as long as the government supports saving by running a deficit.
1191	When there is an external deficit, the private sector can save overall (spend less overall than it earns) as long as the government supports saving by running a deficit.
1666	When we observe a government recording a fiscal surplus which means it is withdrawing more purchasing power from the economy than it is adding, we know that it is seeking to attenuate the growth in aggregate demand.
1803	Whether the government records a fiscal deficit when the domestic private sector is spending less than it earns depends on the size of the external deficit.
854	Which budget deficit outcome is the least expansionary?
995	Which budget deficit outcome is the least expansionary?
1088	Which budget deficit outcome is the most expansionary?
739	Which budget deficit outcome is the most expansionary?
1762	Which fiscal deficit is the most expansionary?
1220	Which fiscal deficit outcome (expressed in terms of the scale relative to GDP) is the most expansionary in terms of aggregate demand?
1366	Which fiscal deficit outcome is the least expansionary?
1308	Which fiscal deficit outcome is the least expansionary in terms of its impact on real GDP growth?
1388	Which fiscal deficit outcome is the most expansionary?
1698	Which fiscal position outcome is the least expansionary?
2521	. Which government deficit outcome is the most expansionary?
1143	Which government deficit outcome is the most expansionary?
2234	Which government deficit outcome is the most expansionary?
2240	Which government deficit outcome is the most expansionary?
2390	Which government deficit outcome is the most expansionary?
2399	Which government deficit outcome is the most expansionary?
2533	Which government deficit outcome is the most expansionary?
2303	Which nations will be considered to have the highest GDP over the year?\n<br />\n<br />\n<ol>\n<li>(a) A military-inclined nation that produces $130 billion worth of new tanks and jet fighters in addition to $100 billion worth of all other final goods and services.</li>\n<li>(b) A nation that produces no military equipment, but instead, creates a new renewable industry that produces $200 billion worth of new solar panels, pays $20 billion out to old aged pensioners, and produces and additional $30 billion worth of all other final goods and services.</li>\n<li>(c) A social democratic nation that produces $10 billion worth of new military equipment, builds $50 billion worth of new schools and universities, and produces an addition $170 billion worth of all other final goods and services.</li>\n<li>(d) A nation where the government spends $40 billion in environmental restoration projects, businesses purchase new machinery and equipment worth $30 billion, export sales to the rest of the world equal $60 billion and consumers purchase $100 billion worth of final goods and services.</li>\n</ol>
70	Which of the following is <strong>not</strong> an example of inflation?
2299	Which of the following would add to GDP in any on period?\n<br />\n<ol>\n<li>(a) The purchase of some strawberries from the supermarket.</li>\n<li>(b) The payment by the national government for public servants in the tax department.</li>\n<li>(c) The payment by the national government to an aged pension recipient.</li> \n<li>(d) The purchase of a old model car from a car dealer.</li>\n<li>(e) The purchase of some house paint by an owner occupier as part of a refurbishment project.</li>\n<li>(f) The purchase of some house paint by a professional painting tradesperson as part of a refurbishment project.</li>\n<li>(g) The sale of some military equipment to another country.\n<li>(h) The purchase of some shares in an airline company.</li>\n</ol>
2537	Which of the following would add to GDP in any on period?\n\n(a) The purchase of some strawberries from the supermarket.\n(b) The payment by the national government for public servants in the tax department.\n(c) The payment by the national government to an aged pension recipient.\n(d) The purchase of an old model car from a car dealer.\n(e) The purchase of some house paint by an owner occupier as part of a refurbishment project.\n(f) The purchase of some house paint by a professional painting tradesperson as part of a refurbishment project.\n(g) The sale of some military equipment to another country.\n(h) The purchase of some shares in an airline company.
2309	Which of these situations represents an inflationary episode in the macroeconomic sense?\n\n<ol>\n<li>(a) On July 1, 2000, the Australian government introduced a Goods and Services Tax of 10 per cent on most goods and services (with some exemptions). In the September-quarter 2000, the Consumer Price Index rose by 6.1 per cent.</li>\n<li>(b) The press reported that Australias property prices rose at their fastest rate since 2003 in February 2021.</li>\n<li>(c) The Consumer Price Index rose by 9 per cent in month one, six per cent in month two and 3 per cent in month three.</li>\n<li>(d) The Consumer Price Index rose by 3 per cent in month one, 6 per cent in month two and 9 per cent in month three.</li>\n</ol>
1624	Which picture best describes Santa heading out on Xmas Day to hand out presents?\n\n<br>\n<br>\nOption A:\n\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2016/12/Cold_Santa.png\><img src=\https://billmitchell.org/blog/wp-content/uploads/2016/12/Cold_Santa.png\ alt=\\ width=\296\ height=\183\ class=\alignnone size-full wp-image-35047\ /></a>\n<div style=\clear:both;\></div>\n\n<br>\n<br>\n\nOption B:\n\n<a href=\https://billmitchell.org/blog/wp-content/uploads/2016/12/Hot_Santa.png\><img src=\https://billmitchell.org/blog/wp-content/uploads/2016/12/Hot_Santa.png\ alt=\\ width=\296\ height=\175\ class=\alignnone size-full wp-image-35048\ /></a>\n<div style=\clear:both;\></div>
1718	Which scenario represents a more expansionary outcome
2190	Which scenario represents a more expansionary outcome
1866	Which scenario represents a more expansionary outcome: (a) A fiscal deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 3 per cent of GDP). (b) A fiscal deficit equivalent to 3 per cent of GDP. (c) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (b)
1432	Which scenario represents a more expansionary outcome: (a) A fiscal deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 3 per cent of GDP). (b) A fiscal deficit equivalent to 3 per cent of GDP. (c) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (b).
1109	Which scenario represents a more expansionary outcome:\n(a) A budget deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 3 per cent of GDP).\n(b) A budget deficit equivalent to 3 per cent of GDP.\n(c) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (b)
1879	Which scenario represents a more expansionary outcome:\n(a) A fiscal deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 2 per cent of GDP).\n(b) A fiscal deficit equivalent to 4 per cent of GDP (where the automatic stabiliser component is zero).\n(c) A fiscal deficit of 2 per cent.\n(d) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (c)
639	Which scenario represents a more expansionary outcome:\n<br />\n(a) A budget deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 3 per cent of GDP).\n<br />\n(b) A budget deficit equivalent to 3 per cent of GDP.\n<br />\n(c) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (B)
869	Which scenario represents a more expansionary outcome:\n\n(a) A budget deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 3 per cent of GDP).\n\n(b) A budget deficit equivalent to 3 per cent of GDP.\n\n(c) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (b)
1960	Which scenario represents a more expansionary outcome:\n<ul>\n<li>(a) A fiscal deficit equivalent to 2 per cent of GDP (including the impact of automatic stabilisers equivalent to 1 per cent of GDP).</li>\n<li>(b) A fiscal deficit equivalent to 2 per cent of GDP completely 'structural' in nature.</li>\n<li>(c) A fiscal deficit of equivalent to 3 per cent completely 'cyclical' in nature.</li>\n<li>(d) You cannot tell because of the different cyclical and structural components in the previous options.</li>\n</ul>
1776	While a currency-issuing government does not have to issue bonds to match its deficit spending, one of the advantages of raising debt from the private sector is that it provides a boost to private wealth.
932	While a currency-issuing government does not have to issue bonds to match its deficit spending, one of the advantages of raising debt from the private sector is that it provides a boost to private wealth.
1875	While a currency-issuing government does not have to issue debt to fund its deficit spending, the debt-issuance does reduce the inflation risk  associated with the deficits.
915	While a currency-issuing government does not have to issue debt to match its deficit spending, it does reduce the inflation risk embodied in all spending when it issues debt and drains the purchasing power in the private sector to give itself more nominal spending space.
1415	While a currency-issuing government does not have to issue debt to the non-government sector to match its deficit spending, it does reduce the inflation risk embodied in the spending because it drains the purchasing power of the private sector which gives itself more nominal spending space.
1265	While a currency-issuing government does not need to issue to debt in order to raise funds prior to spending, one effect of draining funds out of the system by borrowing from the private sector is that it reduces the risk that public spending will overheat the economy.
2216	While a currency-issuing government does not need to issue to debt in order to raise funds prior to spending, one effect of draining funds out of the system by borrowing from the private sector is that it reduces the risk that public spending will overheat the economy.
278	While a national government that issues its own currency is not revenue-constrained it is possible that the demands on the budget posed by the need to provide pensions and health care to an increasing proportion of the population will be impossible due to inflation.
1976	While a sovereign government is not revenue constrained and voluntarily constrains itself to borrow to cover its net spending position, it remains the case that by substituting its spending for the borrowed funds it reduces the private capacity to borrow and spend.
230	While a sovereign government is not revenue constrained and voluntarily constrains itself to borrow to cover its net spending position, it remains the case that by substituting its spending for the borrowed funds it reduces the private capacity to borrow and spend.
332	While a sovereign government is not revenue constrained and voluntarily constrains itself to borrow to cover its net spending position, it remains the case that by substituting its spending for the borrowed funds it reduces the private capacity to borrow and spend.
1278	While bank lending is capital constrained a further constraint on excess lending would be created by regulators if a 100 per cent reserve ratio (that is, all loans had to be backed by reserves) was imposed.
576	While bank lending is capital constrained a further constraint on excess lending would be created by regulators if a 100 per cent reserve ratio (that is, all loans had to be backed by reserves) was imposed.
597	While budget deficits rise due to the operation of the automatic stabilisers, as growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government budget balance returns to its appropriate level.
7	While budget surpluses withdraw private sector purchasing power
2046	While continuous national governments deficits are possible if the non-government sector desires to save overall, they do imply continuously rising public debt levels as a percentage of GDP (under current debt-issuance arrangements).
2168	While continuous national governments deficits are possible if the non-government sector desires to save overall, they do imply continuously rising public debt levels under current institutional arrangements.
1827	While continuous national governments deficits are possible if the non-government sector desires to save, they do imply continuously rising public debt levels as a percentage of GDP.
241	While continuous national governments deficits are possible if the non-government sector desires to save, they do imply continuously rising public debt levels as a percentage of GDP.
339	While continuous national governments deficits are possible if the non-government sector desires to save, they do imply continuously rising public debt levels as a percentage of GDP.
2007	While continuous national governments deficits are recommended if the non-government sector desires to save, they do imply continuously rising public debt levels as a percentage of GDP under current institutional arrangements.
1463	While fiscal deficits rise due to the operation of the automatic stabilisers, these effects work in a counter-cyclical fashion to ensure that the government fiscal balance returns to its appropriate level once growth resumes.
27	While it is likely that the GDP (output) gap will be around 5 per cent this year, the national government's capacity to fill this gap
200	While it is true that the central bank can always set the interest rate it desires, credit ratings agencies can still force governments to pay higher returns on its borrowings at longer maturities by downgrading the quality of the sovereign debt.
42	While it is true that the federal government is not revenue-constrained, the fact that it voluntarily issues debt every time it net spends
713	While Modern Monetary Theory (MMT) indicates there is no particular economic or financial significance of a rising public debt ratio for a sovereign currency-issuing nation it recognises the political constraints that governments operate within. Accordingly, it recognises there is a trade-off between the need to run budget surpluses to reduce the public debt ratio and the political problems that austerity brings.
840	While Modern Monetary Theory (MMT) indicates there is no particular economic or financial significance of a rising public debt ratio for a sovereign currency-issuing nation it recognises the political constraints that governments operate within. Accordingly, it recognises there is a trade-off between the need to run budget surpluses to reduce the public debt ratio and the political problems that austerity brings.
2093	While tax liabilities are crucial to legimitise government spending, the resulting tax revenue does not fund the spending. However, it does cause unemployment.
227	While the central bank unambiguously sets the short-term interest rate, it can also control all yields along the maturity curve by announcing explicit ceilings for yields on longer-maturity government debt and then offering an infinite capacity to purchase such bonds at prices consistent with the ceilings. This statement is clearly false because ratings agencies can influence spreads on government debt.
161	While the crowding out hypothesis does not apply to budget deficits in a normal range, the fact that bond yields ultimately rise if the bond markets get saturated with government debt confirms that there is an upward effect on interest rates at some point from continued deficits.
2126	While the desire by governments to reduce their public debt ratios through fiscal austerity is ill-founded, the strategy will always succeed but at the cost of higher unemployment.
1926	While the EMU nations cannot use the exchange rate mechanism to adjust for trading imbalances arising from a lack of competitiveness, they will improve their competitive position by reducing their domestic wage and price levels (the so-called internal devaluation).
264	While the US government is sovereign in its own currency, increased nominal expenditure on health care will still reduce the real resources available for other uses and so political choices have to be made.
2263	Widening the tax base provides the government with more capacity to spend.
2556	Widening the tax base provides the government with more capacity to spend.
2025	With fiscal and monetary policy tied by the EMU arrangements, the only adjustment mechanism left for Eurozone Member States is to reduce wages and prices to restore external competitiveness. While harsh, eventually the competitive position improves, if wages and prices are successfully cut.
624	With fiscal austerity now in vogue, Modern Monetary Theory (MMT) would not dispute the argument that workers might endanger their employment prospects by demanding real wages growth at present.
165	Within a narrow band, the central bank can always control the short-term interest rate in a fixed exchange rate system because there is never a constraint on the governments ability to add to bank reserves.
1201	With reserve requirements low or zero, bank lending is capital-constrained rather than reserve constrained. But that would change if, for example, the central bank forced banks to maintain a reserve ratio of 100 per cent.
726	With reserve requirements low or zero, bank lending is capital-constrained rather than reserve constrained. But that would change if, for example, the central bank forced banks to maintain a reserve ratio of 100 per cent.
1110	With rising aged dependency ratios, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its aeging citizens.
208	With the EMU creating a fixed nominal exchange rate system across member states and monetary policy fixed by the ECB, fiscal policy is the only policy left to a member country to deal with a crisis. The problem then is that its ability to use fiscal policy is constrained by the Maastricht Treaty.
443	With the Eurozone nations unable to gain competitive relief via nominal exchange rate adjustments the hope is that by deflating wages and prices real unit labour costs will fall. Assuming other nations do nothing and wages and prices fall at the same rate, then a real exchange rate depreciation (relative to other nations) requires labour productivity and employment growth to rise.
1496	With the Eurozone nations unable to gain competitive relief via nominal exchange rate adjustments the hope is that by deflating wages and prices real unit labour costs will fall. Assuming other nations do nothing and wages and prices in one nation fall at the same rate, then a real exchange rate depreciation (relative to other nations) requires labour productivity and employment growth to rise.
2419	Workers can enjoy a stable share of GDP over time if their money wages increase in line with labour productivity.
1001	Workers can enjoy a stable share of GDP over time if they secure wage increases in line with the growth in their contribution to production.
1957	Workers can enjoy a stable share of GDP over time if they secure wage increases in line with the growth in their contribution to production.
530	Workers can enjoy a stable share of GDP over time if they secure wage increases in line with the growth in their contribution to production.
1479	Workers can enjoy a stable share of national income over time if they secure wage and salary increases in line with the growth in their contribution to production (labour productivity).
2015	Workers enjoy a stable share of GDP over time if they secure wage increases in line with labour productivity.
1993	Workers enjoy real wage increases when the rate of growth in earnings outstrips labour productivity growth.