Quiz #510

• 1. In general, the estimates provided by the organisations such as the OECD and IMF of the impact of the automatic stabilisers are biased upwards.
• False
• True
• 2. If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP to even higher levels, will ensure the government fiscal balance is in deficit, irrespective of what the government desires.
• False
• True
• 3. When a government runs a continuous fiscal deficit, public spending builds up over time.
• False
• True

Quiz #510 answers

• 1. In general, the estimates provided by the organisations such as the OECD and IMF of the impact of the automatic stabilisers are biased upwards.

Answer: False

• 2. If there is an external deficit, efforts by the private domestic sector to increase its overall saving as a percentage of GDP to even higher levels, will ensure the government fiscal balance is in deficit, irrespective of what the government desires.

Answer: True

• 3. When a government runs a continuous fiscal deficit, public spending builds up over time.

Answer: False