Quiz #3

• The only essential requirement for a sovereign currency is
• that it is accepted as a means of exchange.
• that it is the only unit in which tax obligations to the government can be extinguished.
• that it possesses intrinsic value which attracts people to demand it.
• If the national government has been paying off debt
• its capacity to expand the economy should a recession arise is unaltered.
• it has less capacity to expand the economy should a recession arise.
• it has more capacity to expand the economy should a recession arise.
• Taxation functions
• to create sellers of real goods and services, so that the government can spend its otherwise worthless currency.
• to ensure the government has enough cash to fulfill its electoral mandate.
• to allow the government to run a budget surplus to provide for the future needs of the society.
• The federal stimulus package will fail
• if it requires so much debt to be issued that it scares global financial markets.
• if it goes into the hands of people who merely save it.
• if it increases imports faster than exports.
• Trade unions who advocate shorter hours (work sharing) as a national solution to rising unemployment
• should be applauded for their willingness to compromise which will also lessen the deficit stimulus that is required.
• are working against their members interests unless the workers total incomes are maintained and they persuade the government to run deficits sufficient to fill the spending gap.
• should be arguing for layoffs because they hurt less people and would lessen the deficit stimulus required.