Quiz #625

• 1. Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe: A fiscal deficit equal to 1 per cent of GDP. A budget surplus equal to 1 per cent of GDP. A budget deficit equal to 5 per cent of GDP. A budget surplus equal to 5 per cent of GDP.
• A fiscal deficit equal to 1 per cent of GDP.
• A fiscal surplus equal to 1 per cent of GDP.
• A fiscal deficit equal to 5 per cent of GDP.
• A fiscal surplus equal to 5 per cent of GDP.
• 2. When a government's fiscal deficit rises we can conclude that it is pursuing an expansionary fiscal policy.
• False
• True
• 3. Given a fiat currency issuing nation is not revenue constrained, it is incorrect to say that recipients of income support provided by such a national government are living off the hard work of those who pay income taxes.
• False
• True

Quiz #625 answers

• 1. Assume that the national accounts of a nation is reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP. We would also observe: A fiscal deficit equal to 1 per cent of GDP. A budget surplus equal to 1 per cent of GDP. A budget deficit equal to 5 per cent of GDP. A budget surplus equal to 5 per cent of GDP.

Answer: A fiscal deficit equal to 1 per cent of GDP.

• 2. When a government's fiscal deficit rises we can conclude that it is pursuing an expansionary fiscal policy.

Answer: False

• 3. Given a fiat currency issuing nation is not revenue constrained, it is incorrect to say that recipients of income support provided by such a national government are living off the hard work of those who pay income taxes.

Answer: False