Quiz #91

• 1. The use of a budget surplus to create a sovereign fund provides the government with more spending options in the future.
• True
• False
• Maybe
• 2. Fiscal rules ultimately fail to deliver the announced budget targets because the government does not control the budget outcome.
• True
• False
• Maybe
• 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.
• True
• False
• Maybe
• 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.
• True
• False
• Maybe
• 5. Premium Question: The monetary base always adjusts to changes in the money supply.
• True
• False
• Maybe if the central bank imposes reserve requirements