Quiz #487

• 1. As a matter of accounting, the net financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt.
• False
• True
• 2. In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the private domestic sector cannot reduce its overall debt levels (by overall saving) without incurring employment losses.
• False
• True
• 3. The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards counter-cyclical responses when private spending is weak.
• False
• True