Quiz #675

• 1. If there is more money in the economy its value always declines.
• False
• True
• 2. A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
• False
• True
• 3. It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, the presence of high inflation reduces the effectiveness of this strategy.
• False
• True

Quiz #675 answers

• 1. If there is more money in the economy its value always declines.

Answer: False

• 2. A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.

Answer: True

• 3. It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, the presence of high inflation reduces the effectiveness of this strategy.

Answer: True