Quiz #462

• 1. A currency-issuing government can run a balanced fiscal position (spending equals tax receipts) over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
• False
• True
• 2. A basic understanding of Modern Monetary Theory (MMT) would leave you to conclude that excessive real wage demands by workers can cause unemployment.
• False
• True
• 3. The achievement of a fiscal surplus indicates that the national government is:
• You cannot conclude anything about the government's policy intentions.
• Trying to reduce public debt
• Trying to slow the economy down and contain inflation.

Quiz #462 answers

• 1. A currency-issuing government can run a balanced fiscal position (spending equals tax receipts) over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.

Answer: True

• 2. A basic understanding of Modern Monetary Theory (MMT) would leave you to conclude that excessive real wage demands by workers can cause unemployment.

Answer: True

• 3. The achievement of a fiscal surplus indicates that the national government is:

Answer: You cannot conclude anything about the government's policy intentions.