Quiz #536

• 1. The private domestic sector will save overall even if the government fiscal balance is in surplus as long as net exports are positive.
• False
• True
• 2. The difference between quantitative easing and an increasing fiscal deficit is that the former creates no new net financial assets in the currency of issue.
• False
• True
• 3. A fiscal deficit that is equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a deficit outcome that is equivalent to 3 per cent of GDP.
• False
• True

Quiz #536 answers

• 1. The private domestic sector will save overall even if the government fiscal balance is in surplus as long as net exports are positive.

Answer: False

• 2. The difference between quantitative easing and an increasing fiscal deficit is that the former creates no new net financial assets in the currency of issue.

Answer: True

• 3. A fiscal deficit that is equivalent to 5 per cent of GDP always signals a more expansionary fiscal intent from government than a deficit outcome that is equivalent to 3 per cent of GDP.

Answer: False