1. Only one of the following propositions is possible (with all balances expressed as a per cent of GDP):

Answer: A nation can run an external deficit and equal government surplus while the private domestic sector is dis-saving overall.

2. The more funds that commercial banks have on account with the central bank the more they can lend out to customers.

Answer: False

3. Modern Monetary Theory (MMT) considers that the public debt ratio is of no concern because economic growth will always bring it down after a recession.

Answer: False