Quiz #559 answers

• 1. In the recent European Commission Autumn 2019 Economic Forecast we learned that many nations, still carrying elevated levels of unemployment were judged to be operating at over-full capacity. This tells us that the Commission's structural deficit estimates are typically:

Answer: biased upwards

• 2. When a sovereign government issues debt it logically increases the financial assets that are held by the non-government sector $-for-$.

Answer: False

• 3. Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy target become redundant if the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).

Answer: Maybe