Quiz #572 answers

• 1. While the desire by governments to reduce their public debt ratios through fiscal austerity is ill-founded, the strategy will always succeed but at the cost of higher unemployment.

Answer: False

• 2. The Confederate government in 1861 could have eased the inflationary impact of its war spending by issuing more bonds than it did.

Answer: False

• 3. When net exports are negative, government deficits will be required if the private domestic sector is to save overall.

Answer: True