Quiz #366 answers

• 1. A fact that is overlooked by those promoting austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government fiscal balance returns to its appropriate level.

Answer: False

• 2. Rising government bond yields for new issues indicate:

Answer: Answers (b) and (d) depending on the situation.

• 3. When the national government's fiscal balance moves into surplus:

Answer: you cannot conclude anything about the government's policy intentions.