1. The unemployed on income support benefits live off the hard work of those who pay taxes.

Answer: True

2. A potential problem with running continuous fiscal deficits is that the spending builds up over time which adds to inflationary pressures.

Answer: False

3. If private domestic investment is less than private domestic saving, and, the external sector is draining aggregate demand, then the government fiscal balance has to be in deficit no matter what level of GDP is produced.

Answer: True