Quiz #665 answers

• 1. During the American Civil War, the Confederate states experienced rising inflation as a result of their war spending in 1861. The Confederate Government could have eased the inflationary impact of this spending by issuing more bonds than it did.

Answer: False

• 2. Government deficits can crowd out private spending.

Answer: True

• 3. If there is an external deficit, then government deficits are required if private households are to save.

Answer: False