Quiz #426 answers

• 1. The Australian Treasury like many official agencies equates the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with full employment and uses this to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be:

Answer: Biased upwards

• 2. Under a fiat monetary system, the absence of currency convertibility means that:

Answer: government can motivate people to exchange labour for public spending by fining anyone who walks down the street.

• 3. The act of issuing debt by a sovereign government logically:

Answer: has no immediate impact on the overall holdings of assets held by the non-government sector $-for-$