Quiz #223

• 1. The private domestic sector cannot save if the nation's external sector is in balance and the government runs a balanced budget.
• False
• True
• 2. Modern Monetary Theory rejects the notion of the money multiplier but still accepts that continually expanding the money supply will inevitably be inflationary.
• False
• True
• 3. By voluntarily issuing debt to match its net spending and taking funds out of the private sector, governments create more non-inflationary room for themselves to spend.
• False
• True

Quiz #223 answers

• 1. The private domestic sector cannot save if the nation's external sector is in balance and the government runs a balanced budget.

Answer: False

• 2. Modern Monetary Theory rejects the notion of the money multiplier but still accepts that continually expanding the money supply will inevitably be inflationary.

Answer: False

• 3. By voluntarily issuing debt to match its net spending and taking funds out of the private sector, governments create more non-inflationary room for themselves to spend.

Answer: False