Quiz #309

• 1. By defining full employment at levels above the minimum unemployment rate that could be sustained in any nation, organisations such as the IMF and the OECD, generate estimates of structural fiscal deficits that are biased downwards.
• False
• True
• 2. When a sovereign government issues debt it logically:
• increases the assets that are held by the non-government sector $-for-$.
• has no impact on the overall holdings of assets held by the non-government sector $-for-$.
• reduces the capacity of the private sector to borrow from banks because they use their deposits to buy the bonds.
• 3. Under a fiat monetary system, the absence of currency convertibility means:
• there is no reason for people to hold currency as a hedge against gold price falls.
• that the government can motivate people to exchange goods and services in return for public spending by charging a fixed fee in the local currency for leaving one's home each day.
• that the currency is only convertible into government bonds rather than gold.

Quiz #309 answers

• 1. By defining full employment at levels above the minimum unemployment rate that could be sustained in any nation, organisations such as the IMF and the OECD, generate estimates of structural fiscal deficits that are biased downwards.

Answer: False

• 2. When a sovereign government issues debt it logically:

Answer: has no impact on the overall holdings of assets held by the non-government sector $-for-$.

• 3. Under a fiat monetary system, the absence of currency convertibility means:

Answer: that the government can motivate people to exchange goods and services in return for public spending by charging a fixed fee in the local currency for leaving one's home each day.