Quiz #627

• 1. When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) end up spending less than they receive, irrespective of the GDP growth rate.
• False
• True
• 2. Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency can always roll over its "own currency" debt obligations and never has to pay them back.
• False
• True
• 3. Over the last two decades, there have been major redistributions of national income towards profits in many nations. This has occurred because of the suppression of real wages growth.
• False
• True

Quiz #627 answers

• 1. When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) end up spending less than they receive, irrespective of the GDP growth rate.

Answer: True

• 2. Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government, which issues its own currency can always roll over its "own currency" debt obligations and never has to pay them back.

Answer: False

• 3. Over the last two decades, there have been major redistributions of national income towards profits in many nations. This has occurred because of the suppression of real wages growth.

Answer: False