Quiz #531

• 1. As long as employment growth keeps pace with labour force growth, unemployment will not rise.
• False
• True
• 2. The non-government sector is immediately wealthier if the government matches it deficit with new debt issues compared to a situation where no debt was issued.
• False
• True
• 3. If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running:
• A surplus equal to 1 per cent of GDP.
• A surplus equal to 5 per cent of GDP.
• A deficit equal to 1 per cent of GDP.
• A deficit equal to 5 per cent of GDP.

Quiz #531 answers

• 1. As long as employment growth keeps pace with labour force growth, unemployment will not rise.

Answer: False

• 2. The non-government sector is immediately wealthier if the government matches it deficit with new debt issues compared to a situation where no debt was issued.

Answer: False

• 3. If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must be running:

Answer: A deficit equal to 1 per cent of GDP.