Quiz #2

• Hours-based measures of labour underutilisation will always be higher than person-based measures
• if the unemployment rate rises.
• if the unemployed want part-time work only.
• if there is underemployment.
• While budget surpluses withdraw private sector purchasing power
• they also undermine the overall capacity to save.
• they do help the economy save income.
• they help keep interest rates down.
• The federal budget deficit can be excessive
• if household savings are not used efficiently.
• if investors cannot get funds to build productive infrastructure.
• if the net government spending exceeds the private desire to save.
• The US government's latest plan (the Public-Private Investment Program) will
• will not impede the capacity of the US Government to create full employment.
• undermine the capacity of fiscal policy to stimulate demand because it is using public funds which could be used elsewhere.
• help stabilise the economy because it will clear out all the toxic assets in the private banks.
• The current trend to increasing budget deficits
• will burden future generations if it fails to generate real growth in employment and national income.
• will burden future generations only if the government has to pay back the debt.
• will help future generations if it is also accompanied by quantitative easing which eases the debt burden.

Quiz #2 answers

• Hours-based measures of labour underutilisation will always be higher than person-based measures

Answer: if there is underemployment.

Explanation: Please consult the blog Labour market tanking for more information.

• While budget surpluses withdraw private sector purchasing power

Answer: they also undermine the overall capacity to save.

Explanation: Please see the blog Budget surpluses are not saving for further information.

• The federal budget deficit can be excessive

Answer: if the net government spending exceeds the private desire to save.

Explanation: Please see the blog Size of deficit 101 for further information.

• The US government's latest plan (the Public-Private Investment Program) will

Answer: will not impede the capacity of the US Government to create full employment.

Explanation: Please see the blog US detox lunacy for further information.

• The current trend to increasing budget deficits

Answer: will burden future generations if it fails to generate real growth in employment and national income.

Explanation: Please see the blog Size of deficit 101 for further information.