Quiz #366
- 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.
- 2. Rising government bond yields for new issues indicate:
- Answers (a) and (d) depending on the situation.
- that private investors consider public debt to be riskier.
- that government spending is increasing the cost of borrowing for private investors.
- that economic growth is reducing private risk assessments of alternative financial investments.
- that government spending is becoming more expensive.
- Answers (b) and (d) depending on the situation.
- 3. When the national government's fiscal balance moves into surplus:
- it is a sign that the government is trying to constrain economic activity.
- it is a sign that the government is worried that inflation is rising.
- you cannot conclude anything about the government's policy intentions.
- Options (a) and (b).
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.