Quiz #378

• 1. Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.
• False
• True
• 2. For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.
• False
• True
• 3. If the central bank pays a positive interest rate on excess bank reserves then it no longer has to conduct open market operations to ensure a non-zero target policy rate is sustained.
• False
• True

Quiz #378 answers

• 1. Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.

Answer: True

• 2. For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.

Answer: True

• 3. If the central bank pays a positive interest rate on excess bank reserves then it no longer has to conduct open market operations to ensure a non-zero target policy rate is sustained.

Answer: False