Quiz #443 answers

• 1. When a sovereign government issues debt to match its fiscal deficit the debt adds to the financial wealth of the non-government sector.

Answer: False

• 2. Ignoring any reserve requirements that might be imposed, if the central bank pays a positive interest rate on overnight reserves held by the commercial banks then it may still have to conduct open market operations as a means of ensuring that levels of bank reserves are consistent with its policy target rate of interest.

Answer: True

• 3. If participation rates are constant, percentage unemployment will not change as long as employment growth matches the pace of growth in the working age population (people above 15 years of age).

Answer: True