Quiz #257

• 1. This week the Australian Bureau of Statistics released data showing that nominal wages growth in Australia over the last 12 months was 2.6 per cent. Over the same period, the annual inflation rate has been 2.7 per cent. As a result of this information we can conclude that there has been a redistribution of national income to profits because the real wage has fallen.
• False
• True
• 2. The non-government sector net wealth rises when the government issues bonds to exactly match ($-for-$) the increase in the fiscal deficit.
• False
• True
• 3. Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find:
• A public fiscal deficit.
• A public fiscal surplus.
• Cannot tell because we don't know the scale of the private domestic sector saving as a % of GDP.

Quiz #257 answers

• 1. This week the Australian Bureau of Statistics released data showing that nominal wages growth in Australia over the last 12 months was 2.6 per cent. Over the same period, the annual inflation rate has been 2.7 per cent. As a result of this information we can conclude that there has been a redistribution of national income to profits because the real wage has fallen.

Answer: False

• 2. The non-government sector net wealth rises when the government issues bonds to exactly match ($-for-$) the increase in the fiscal deficit.

Answer: False

• 3. Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find:

Answer: A public fiscal deficit.