Quiz #288 answers

• 1. When there is an external deficit, the private sector can reduce its overall indebtedness as long as the government supports private saving by running a deficit.

Answer: False

• 2. When a sovereign government issues debt it has no impact on the overall holdings of financial assets held by the non-government sector.

Answer: True

• 3. Rising 10-year government bond yields tell us that private bond markets are demanding increased risk coverage for these assets.

Answer: False