Quiz #254 answers

• 1. Increasing tax revenue provides the government with more capacity to spend.

Answer: True

• 2. If there is an external deficit, and the domestic private sector successfully increases its overall saving as a percentage of GDP, then income adjustments will ensure the government fiscal balance is in deficit.

Answer: True

• 3. Estimates of structural fiscal deficits published the multilateral agencies such as the IMF and the OECD are to be treated with suspicion because they are based on excessively optimistic estimates of potential GDP.

Answer: False