Quiz #95 answers

• 1. A coordinated fiscal austerity plan across all nations (aiming to run budget surpluses) would not be possible without impairing growth because it is likely that the private domestic sector in some countries will desire to save overall.

Answer: False

• 2. The government can always support private domestic sector saving in nominal terms by increasing the budget deficit and stimulating aggregate demand and national income.

Answer: False

• 3. The ratio of the "stock of money" and bank reserves has fallen dramatically in the US in recent years. This is best understood in terms of the tightly constrained credit markets due to recession.

Answer: True

• 4. The higher the tax revenue, the more the government can spend.

Answer: True

• 5. Premium question: A sovereign national government cannot generate full employment without taxation.

Answer: True