Quiz #403

• 1. A program of fiscal austerity (pushing towards surplus) will always undermine attempts by the private domestic sector to reduce its indebtedness when a nation external balance is in deficit.
• False
• True
• 2. A rising level of bank reserves will make it easier for banks to expand credit to the private sector if the demand for loans increases.
• False
• True
• 3. The public debt ratio is of no concern because economic growth will always bring it down after a recession.
• False
• True

Quiz #403 answers

• 1. A program of fiscal austerity (pushing towards surplus) will always undermine attempts by the private domestic sector to reduce its indebtedness when a nation external balance is in deficit.

Answer: True

• 2. A rising level of bank reserves will make it easier for banks to expand credit to the private sector if the demand for loans increases.

Answer: False

• 3. The public debt ratio is of no concern because economic growth will always bring it down after a recession.

Answer: False