Quiz #296

• 1. As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt to match its current fiscal deficit.
• False
• True
• 2. When government bond yields for new issues start to rise, government spending becomes more expensive.
• False
• True
• 3. Open market operations as a means of ensuring that levels of bank reserves are consistent with the monetary policy target become redundant whenever the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).
• False
• True