Quiz #94 answers

• 1. If the national government stopped issuing public debt then its deficit spending would be more expansionary than if it matched the deficits with new debt issues.

Answer: False

• 2. Non-government sector net worth does not change when the government issues debt which exactly matches ($-for-$) the increase in net public spending.

Answer: True

• 3. For the wage share in GDP to remain constant, wages have to keep pace with the growth in labour productivity.

Answer: False

• 4. If net exports are contributing to economic growth, then the national government has the room to run a budget surplus without impeding that growth.

Answer: Maybe

• 5. Premium Question: A central bank can control bank lending while maintaining its target monetary policy rate by increasing the price that it charges commercial banks for reserves.

Answer: False