Quiz #514

• 1. When a government such as the US government voluntarily constrains itself by issuing debt to match $-for-$ its net spending position (deficit), it reduces the funds available to the non-government sector for their own spending.
• False
• True
• 2. When the national government's fiscal balance moves into surplus:
• It is a sign that the government is trying to constrain economic activity.
• It is a sign that the government is worried that inflation is rising.
• One cannot conclude anything about the government's policy intentions.
• Options (a) and (b).
• 3. If the external balance remains in surplus, then the national government can run a fiscal surplus without impeding economic growth.
• False
• True

Quiz #514 answers

• 1. When a government such as the US government voluntarily constrains itself by issuing debt to match $-for-$ its net spending position (deficit), it reduces the funds available to the non-government sector for their own spending.

Answer: False

• 2. When the national government's fiscal balance moves into surplus:

Answer: One cannot conclude anything about the government's policy intentions.

• 3. If the external balance remains in surplus, then the national government can run a fiscal surplus without impeding economic growth.

Answer: True