Quiz #20

• 1. 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.
• False
• True
• 2. The latest ABS data shows that total hours worked are falling relative to total persons employed which must mean that underemployment is replacing unemployment.
• False
• True
• 3. 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.
• False
• True
• 4. 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.
• False
• True
• 5. 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.
• False
• True