Quiz #331 answers

• 1. If the household saving ratio rises and there is an external deficit then Modern Monetary Theory (MMT) tells us that the government must increase net spending or else national output and income will fall.

Answer: False

• 2. An economy is projected to grow in real terms by around 1.5 per cent over the next year. It is also predicted that real GDP per employed person will grow by 1.1 per cent over the same period and that average weekly hours worked will remain more or less constant. Which of the following labour force growth rates would provide the basis for an expectation that the unemployment rate will be lower at the end of the year than at the beginning?

Answer: 0.3 per cent

• 3. EMU member nations face solvency risk because they do not issue their own currency. This source of risk would be eliminated if these nations exited the Eurozone and issued their own floating currency.

Answer: False