Quiz #687

• 1. As the sense of emergency surrounding the pandemic seemingly has been forgotten, the European Commission will reinstate the restrictions imposed on deficit and debt ratios by the Stability and Growth Pact, which will increase the solvency risk of the 19 member states.
• True
• False
• 2. If the monthly Labour Force data shows that employment grew by 400 in net terms over the last month, unemployment rose by 10,700, and the participation rate fell by 0.1 points then we can conclude that:
• The labour force grew faster than employment but you cannot tell what happened to the working age population from the information provided.
• The labour force grew faster than employment but not as fast the working age population.
• The working age population grew faster than employment and offset the decline in the labour force arising from the drop in the participation rate.
• 3. If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.
• True
• False

Quiz #687 answers

• 1. As the sense of emergency surrounding the pandemic seemingly has been forgotten, the European Commission will reinstate the restrictions imposed on deficit and debt ratios by the Stability and Growth Pact, which will increase the solvency risk of the 19 member states.

Answer: False

• 2. If the monthly Labour Force data shows that employment grew by 400 in net terms over the last month, unemployment rose by 10,700, and the participation rate fell by 0.1 points then we can conclude that:

Answer: The labour force grew faster than employment but not as fast the working age population.

• 3. If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.

Answer: False