Quiz #240 answers

• 1. Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sector cannot simultaneously spend less than they earn.

Answer: False

• 2. The government needs to raise tax revenue in order to spend.

Answer: True

• 3. The estimates provided by institutions such as the OECD and the IMF of the size of the automatic stabilisers are typically biased downwards.

Answer: True