Quiz #35

• 1. If a national government builds a road and then tears it up again only to rebuild it again later, there is no net gain in employment and national income the second time round.
• False
• True
• 2. Modern monetary theory tells us that the larger is the fiscal deficit the less real resources that will be available for other productive uses.
• False
• True
• 3. Like anything in abundance, it is true that when there is more "money" in the economy its value declines.
• False
• True
• 4. There is the same risk of a generalised inflation arising from a net exports boom as there is from expanding net public spending.
• False
• True
• 5. The only way that you can have unbalanced external accounts across nations (some countries with surpluses and other deficits) is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.
• False
• True

Quiz #35 answers

• 1. If a national government builds a road and then tears it up again only to rebuild it again later, there is no net gain in employment and national income the second time round.

Answer: False

Explanation: Please read Lets just focus on inflation for further information or post a question on the comments page for clarification.

• 2. Modern monetary theory tells us that the larger is the fiscal deficit the less real resources that will be available for other productive uses.

Answer: True

Explanation: Please read Lets just focus on inflation for further information or post a question on the comments page for clarification.

• 3. Like anything in abundance, it is true that when there is more "money" in the economy its value declines.

Answer: False

Explanation: Please read Lets just focus on inflation for further information or post a question on the comments page for clarification.

• 4. There is the same risk of a generalised inflation arising from a net exports boom as there is from expanding net public spending.

Answer: True

Explanation: Please read I have found an inflation threat for further information or post a question on the comments page for clarification.

• 5. The only way that you can have unbalanced external accounts across nations (some countries with surpluses and other deficits) is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.

Answer: True

Explanation: Please read I have found an inflation threat for further information or post a question on the comments page for clarification.