Quiz #521

• 1. The only way that unbalanced external accounts across nations (some countries with surpluses and other deficits) can exist is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.
• False
• True
• 2. Like anything in abundance, it is true that when there is more "money" in the economy its value declines.
• False
• True
• 3. The imposition of a fiscal rule at the national government level that the fiscal position is required to be in balance at all times would eliminate fiscal swings driven by the automatic stabilisers.
• False
• True

Quiz #521 answers

• 1. The only way that unbalanced external accounts across nations (some countries with surpluses and other deficits) can exist is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.

Answer: True

• 2. Like anything in abundance, it is true that when there is more "money" in the economy its value declines.

Answer: False

• 3. The imposition of a fiscal rule at the national government level that the fiscal position is required to be in balance at all times would eliminate fiscal swings driven by the automatic stabilisers.

Answer: False