Quiz #581

• 1. If there is more "money" in the economy its value always declines.
• False
• True
• 2. If national government public works expenditure funds the construction of a road and then the government tears the road up again and rebuilds it, there is no net gain in national income the second time round.
• False
• True
• 3. If there was a fiscal rule imposed such that the national government had to balance its fiscal position at all times then this would also eliminate the sensitivity of the outcome to the automatic stabilisers.
• False
• True

Quiz #581 answers

• 1. If there is more "money" in the economy its value always declines.

Answer: False

• 2. If national government public works expenditure funds the construction of a road and then the government tears the road up again and rebuilds it, there is no net gain in national income the second time round.

Answer: False

• 3. If there was a fiscal rule imposed such that the national government had to balance its fiscal position at all times then this would also eliminate the sensitivity of the outcome to the automatic stabilisers.

Answer: False