Quiz #27

• 1. It is important that households keep saving now to reduce their debt exposure and provide the funds for investment to get the economy moving again.
• False
• True
• 2. If the prudential regulation authority requires all authorised deposit-taking institutions to hold a certain proportion of their assets in the form of government bonds then this amounts to a small government tax on those institutions.
• False
• True
• 3. Under current US legal arrangements, the willingness of the Chinese to purchase US government bonds has allowed the US government to run bigger deficits than they might have.
• False
• True
• 4. If German and Chinese consumers increased their spending it would stimulate the world economy and increase the living standards of countries that export goods to them.
• False
• True
• 5. Sovereign funds do not store budget surpluses as national savings. They just account for assets that the government has bought in the same way that the property records of, say, the public schools and hospitals record holdings of other public assets accumulated through government spending.
• False
• True