Quiz #365

• 1. If a national currency-issuing government stopped issuing public debt, then its deficit spending would be more expansionary than if it matched the deficits with new debt issues.
• False
• True
• 2. If the external sector is in surplus and thus is contributing to domestic economic growth, then the national government must run a fiscal surplus to stop the economy overheating.
• False
• True
• 3. On the day that the government issues debt to match ($-for-$) the increase in its deficit, non-government sector net worth increases.
• False
• True

Quiz #365 answers

• 1. If a national currency-issuing government stopped issuing public debt, then its deficit spending would be more expansionary than if it matched the deficits with new debt issues.

Answer: False

• 2. If the external sector is in surplus and thus is contributing to domestic economic growth, then the national government must run a fiscal surplus to stop the economy overheating.

Answer: False

• 3. On the day that the government issues debt to match ($-for-$) the increase in its deficit, non-government sector net worth increases.

Answer: False