Quiz #330

• 1. If a national government constructs a road in Year 1 but then in Year 2 tears it up and relays it with the recycled road materials, the national income stimulus from the policy is only enjoyed in the first year.
• False
• True
• 2. A 'balanced budget' rule adopted by a national government eliminates the swings in the fiscal balance that arise from the automatic stabilisers.
• False
• True
• 3. The private domestic sector will save overall even if the government's fiscal balance is in surplus as long as net exports are positive.
• False
• True

Quiz #330 answers

• 1. If a national government constructs a road in Year 1 but then in Year 2 tears it up and relays it with the recycled road materials, the national income stimulus from the policy is only enjoyed in the first year.

Answer: False

• 2. A 'balanced budget' rule adopted by a national government eliminates the swings in the fiscal balance that arise from the automatic stabilisers.

Answer: False

• 3. The private domestic sector will save overall even if the government's fiscal balance is in surplus as long as net exports are positive.

Answer: False