Quiz #211 answers

• 1. Modern Monetary Theory (MMT) indicates that a nation can fall into mass unemployment if real wages growth is rapid.

Answer: True

• 2. 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.

Answer: False

• 3. Under a fiat monetary system, the absence of currency convertibility means:

Answer: (b) by imposing a fine on anyone who has a red car, the government can motivate red car owners to offer goods and services in return for public spending.