Quiz #435 answers

• 1. Irrespective of what the government does, the private domestic sector can still save overall, as long as the external sector delivers a surplus.

Answer: False

• 2. Central bank interest payments to the private banks on reserves reduces the private banks' incentive to advance credit to the private sector.

Answer: False

• 3. Rising government deficits indicate that its fiscal stance is becoming more expansionary.

Answer: False