Quiz #585

• 1. The private domestic sector can save overall even if the government fiscal balance is in surplus as long as net exports are positive.
• False
• True
• 2. When the central bank purchases government bonds in the secondary bond market, it has the equivalent impact on financial assets in the non-government sector as if a fiscal deficit, which increased reserves by the same amount would have.
• False
• True
• 3. While continuous national governments deficits are possible if the non-government sector desires to save overall, they do imply continuously rising public debt levels under current institutional arrangements.
• False
• True

Quiz #585 answers

• 1. The private domestic sector can save overall even if the government fiscal balance is in surplus as long as net exports are positive.

Answer: False

• 2. When the central bank purchases government bonds in the secondary bond market, it has the equivalent impact on financial assets in the non-government sector as if a fiscal deficit, which increased reserves by the same amount would have.

Answer: False

• 3. While continuous national governments deficits are possible if the non-government sector desires to save overall, they do imply continuously rising public debt levels under current institutional arrangements.

Answer: True