Quiz #603

• 1. Nation A is running a small current account deficit and its private domestic sector is saving overall. Nation B has a smaller external deficit (relative to its GDP) but its private domestic sector is balancing its spending and income. The governments in both Nations have to be running deficits.
• False
• True
• Not enough information to answer
• 2. One consequence (perhaps an advantage) of the government issuing bonds to the non-government sector to match its deficit over the alternative of not issuing any new debt, is that the non-government sector is immediately wealthier as a consequence.
• False
• True
• 3. The wage share in national income in Australia fell below 50 per cent in the June-quarter 2020. This means that the real wage fell.
• False
• True

Quiz #603 answers

• 1. Nation A is running a small current account deficit and its private domestic sector is saving overall. Nation B has a smaller external deficit (relative to its GDP) but its private domestic sector is balancing its spending and income. The governments in both Nations have to be running deficits.

Answer: True

• 2. One consequence (perhaps an advantage) of the government issuing bonds to the non-government sector to match its deficit over the alternative of not issuing any new debt, is that the non-government sector is immediately wealthier as a consequence.

Answer: False

• 3. The wage share in national income in Australia fell below 50 per cent in the June-quarter 2020. This means that the real wage fell.

Answer: False