Quiz #570

• 1. A program of fiscal austerity, defined as the government running a fiscal surplus, does not necessarily undermine economic growth.
• False
• True
• 2. The public debt ratio is of no concern because it falls once economic growth resumes.
• False
• True
• 3. The initial expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance compared to a situation when it issues no debt.
• False
• True

Quiz #570 answers

• 1. A program of fiscal austerity, defined as the government running a fiscal surplus, does not necessarily undermine economic growth.

Answer: True

• 2. The public debt ratio is of no concern because it falls once economic growth resumes.

Answer: False

• 3. The initial expansionary impact of deficit spending on aggregate demand is lower when the government matches the deficit with debt-issuance compared to a situation when it issues no debt.

Answer: False