Quiz #582

• 1. If the national government stopped issuing public debt then its deficit spending would be no more expansionary than the current practice of non-government bank reserves through debt issuance.
• False
• True
• 2. Non-government sector net worth does not immediately change when the government issues debt which exactly matches ($-for-$) the increase in net public spending.
• False
• True
• Depends on whether interest is paid on Excess reserves
• 3. If net exports are contributing to economic growth, then the national government may have the room to run a fiscal surplus without impeding that growth.
• False
• True

Quiz #582 answers

• 1. If the national government stopped issuing public debt then its deficit spending would be no more expansionary than the current practice of non-government bank reserves through debt issuance.

Answer: True

• 2. Non-government sector net worth does not immediately change when the government issues debt which exactly matches ($-for-$) the increase in net public spending.

Answer: True

• 3. If net exports are contributing to economic growth, then the national government may have the room to run a fiscal surplus without impeding that growth.

Answer: True