Quiz #145 answers

• 1. The government has two macroeconomic policy arms available - fiscal and monetary policy. However, it only has control over monetary policy.

Answer: True

• 2. Americans enjoy a higher material standard of living as a result of the Chinese holdings of US government debt.

Answer: True

• 3. The creation of a sovereign wealth fund from the proceeds of a budget surplus represents increased national savings.

Answer: False

• 4. 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.

Answer: False

• 5. Premium Question: 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.

Answer: True