Quiz #599

• 1. A rising fiscal surplus tells us that the government is imposing austerity on the economy.
• True
• False
• 2. If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.
• True
• False
• 3. Real government spending can be higher if the government can raise more tax revenue by increasing tax rates.
• True
• False

Quiz #599 answers

• 1. A rising fiscal surplus tells us that the government is imposing austerity on the economy.

Answer: False

• 2. If the household saving ratio rises and there is an external deficit then government must increase net spending to fill the private spending gap or else national output and income will fall.

Answer: False

• 3. Real government spending can be higher if the government can raise more tax revenue by increasing tax rates.

Answer: True