Quiz #356 answers

• 1. When the government matches an increase in deficit spending with debt issued to the private sector, the growth in aggregate demand is less than would be the case if the government didn't borrow at all.

Answer: False

• 2. If the central bank regulated that banks have to hold reserve equivalent to their outstanding loans this would restrict lending.

Answer: False

• 3. In the context of population ageing, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its citizens should the political circumstances permit.

Answer: False