Quiz #466 answers

• 1. Estimates of cyclical fiscal balances by the IMF and other bodies are typically biased upward.

Answer: False

• 2. For nations with an external surplus (such as Norway), it is sensible for the government to run fiscal surpluses and accumulate them in a sovereign fund to create more space for non-inflationary spending in the future.

Answer: False

• 3. We would never observe a state where a nation was running an external deficit (trade and income flows), a fiscal surplus and the private domestic sector was spending less than it was generating.

Answer: True