Quiz #253 answers

• 1. If the household saving ratio and/or the nation's external deficit rises, there is no necessity for the government deficit to rise in order to maintain current output growth.

Answer: True

• 2. A nation experiences growth in total employment in a particular month in net terms, rising unemployment, and a marginal decline in the labour force participation rate. Taken together this information tells you that:

Answer: Labour force growth outstripped employment growth but was less than the growth in the working age population.

• 3. If Brussels relaxed the budget restrictions on national governments that are applicable under the Stability and Growth Pact (3 per cent deficit to GDP ratios and 60 per cent public debt to GDP ratios) then the current solvency risk facing several EMU members would be resolved.

Answer: False