Quiz #303

• 1. A currency-issuing government can always ensure there are first-class services to meet the demands of an ageing population if it has the political will.
• False
• True
• 2. If banks are required to maintain 100 per cent reserve requirements (must have cash reserves to back deposits at all times), then the central bank is able to control the money supply.
• False
• True
• 3. For a nation running a small current account deficit (close to balance), the government fiscal balance will always be in deficit if the domestic private sector is spending less than it earns.
• False
• True

Quiz #303 answers

• 1. A currency-issuing government can always ensure there are first-class services to meet the demands of an ageing population if it has the political will.

Answer: False

• 2. If banks are required to maintain 100 per cent reserve requirements (must have cash reserves to back deposits at all times), then the central bank is able to control the money supply.

Answer: False

• 3. For a nation running a small current account deficit (close to balance), the government fiscal balance will always be in deficit if the domestic private sector is spending less than it earns.

Answer: True