Quiz #420

• 1. The private domestic sector cannot save if a nation's external sector is in balance (and thus making no contribution to real GDP growth) and the government runs a balanced fiscal position.
• False
• True
• 2. If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
• False
• True
• 3. Rising yields on 10-year bond yields rising signify that the bond markets are demanding increased risk premiums for these assets.
• False
• True

Quiz #420 answers

• 1. The private domestic sector cannot save if a nation's external sector is in balance (and thus making no contribution to real GDP growth) and the government runs a balanced fiscal position.

Answer: False

• 2. If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.

Answer: False

• 3. Rising yields on 10-year bond yields rising signify that the bond markets are demanding increased risk premiums for these assets.

Answer: False