1. Only one of the following propositions is possible (with all balances expressed as a per cent of GDP):

None of the above are possible as they all defy the sectoral balances accounting identity.
A nation can run a current account deficit with a government sector surplus that is larger, while the private domestic sector is spending less than they are earning.
A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.
A nation can run a current account deficit accompanied by a government sector surplus of equal proportion to GDP, while the private domestic sector is spending less than they are earning.

2. One possible problem with running continuous budget deficits is that the spending builds up over time and with inflation eventually becoming the risk that has to be managed.

3. If employment growth matches the pace of growth in the civilian population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.