Quiz #91 answers

• 1. The use of a budget surplus to create a sovereign fund provides the government with more spending options in the future.

Answer: False

• 2. Fiscal rules ultimately fail to deliver the announced budget targets because the government does not control the budget outcome.

Answer: True

• 3. If employment growth matches the pace of growth in the working age population (people above 15 years of age) then the economy will experience a constant unemployment rate as long as participation rates do not change.

Answer: True

• 4. In a fiat monetary system (for example, US or Australia) with an on-going external deficit, the domestic private sector can reduce its overall debt levels (by saving) without employment losses, if the national government supports the private de-leveraging process by running a budget deficit.

Answer: Maybe

• 5. Premium Question: The monetary base always adjusts to changes in the money supply.

Answer: True