Quiz #315 answers

• 1. Modern Monetary Theory tells us that a sovereign national government can run deficits without issuing debt. But the debt issuance allows the government to drain demand (private spending capacity) so that the public spending has more non-inflationary room to work within.

Answer: False

• 2. The government and the private domestic sectors cannot simultaneously reduce their debt levels (under current public sector debt-issuance arrangements)

Answer: False

• 3. A sovereign currency-issuing national government cannot generate full employment without taxation.

Answer: True