Quiz #495 answers

• 1. The IMF use their estimates of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be:

Answer: biased upwards.

• 2. Under a fiat monetary system, the absence of currency convertibility means that:

Answer: government can induce us to offer goods and services in return for public spending by fining us for walking down streets.

• 3. Only one of the following statements can be true when you observe rising government bond yields for new issues:

Answer: Bond prices are falling in response to demand.