Quiz #605 answers

• 1. Under current public sector debt-issuance arrangements (where sovereign governments match their deficits with issues of debt), the government and the private domestic sector cannot simultaneously spend less than they earn.

Answer: False

• 2. The estimates provided by institutions such as the OECD and the IMF of the size of the automatic stabilisers are typically biased downwards.

Answer: True

• 3. Governments concerned with their public debt ratio should encourage growth because the ratio will fall once economic growth resumes.

Answer: False