Quiz #324

• 1. When an economy is running an external deficit, national income movements will ensure that only one of the two remaining sectors can spend less than they receive, irrespective of the GDP growth rate.
• False
• True
• 2. Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency, can always roll over its "own currency" debt obligations and never has to pay them back.
• False
• True
• 3. Standing facilities that central banks maintain with commercial banks means that the money supply always adjusts to movements in the monetary base.
• False
• True

Quiz #324 answers

• 1. When an economy is running an external deficit, national income movements will ensure that only one of the two remaining sectors can spend less than they receive, irrespective of the GDP growth rate.

Answer: True

• 2. Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency, can always roll over its "own currency" debt obligations and never has to pay them back.

Answer: False

• 3. Standing facilities that central banks maintain with commercial banks means that the money supply always adjusts to movements in the monetary base.

Answer: False