Quiz #696

• 1. In a fiat monetary system with an on-going external deficit, if a government wants the domestic private sector to reduce its overall debt levels without employment losses, then it has increase its fiscal deficit beyond the size of the external deficit.
• False
• True
• 2. The only time that a fiscal surplus represents increased national savings is when the government creates a sovereign fund.
• False
• True
• 3. The massive build-up of Chinese holdings of US government debt allowed US citizens to enjoy a higher material standard of living overall at the expense of the residents of China.
• False
• True

Quiz #696 answers

• 1. In a fiat monetary system with an on-going external deficit, if a government wants the domestic private sector to reduce its overall debt levels without employment losses, then it has increase its fiscal deficit beyond the size of the external deficit.

Answer: True

• 2. The only time that a fiscal surplus represents increased national savings is when the government creates a sovereign fund.

Answer: False

• 3. The massive build-up of Chinese holdings of US government debt allowed US citizens to enjoy a higher material standard of living overall at the expense of the residents of China.

Answer: True