1. When a currency-issuing government voluntarily constrains itself to borrow from the private sector to cover its deficit spending, it logically reduces the funds available for private investment expenditure.
Answer: False
2. An increasing fiscal deficit tells us nothing about the government's policy intentions.
Answer: True
3. The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is that under the former system:
Answer: the national government had to issue debt to cover spending above taxation.