Quiz #199 answers

• 1. 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.

Answer: False

• 2. 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.

Answer: False

• 3. The tax revenue a government receives importantly constrains the real spending capacity of a sovereign government.

Answer: True