1. When a currency-issuing government voluntarily constrains itself ensure any fiscal deficits are matched by borrowing from the private sector, it reduces the funds available for private investment expenditure.
Answer: False
2. An increasing fiscal deficit tells us nothing about the government's policy intentions.
Answer: True
3. The crucial difference between a monetary system based on the convertible currency backed by gold and a fiat currency monetary is that under the former system:
Answer: The national government had to issue debt to cover spending above taxation.