Question 1 - Just like a household, the government has to finance its spending.

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false

Question 2 - The role of taxes is to finance spending.

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false

Question 3 - Bonds have to be issued to finance the budget deficit if the government is worried about "money creation".

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false

Question 4 - Increasing budget deficits will lead to higher risk premiums being demanded which crowd out other sources of spending.

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false

Question 5 - Governments have to worry about the financing and size of its deficit.

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false

Question 6 - If there is unemployment you know that the budget deficit is too low.

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false

Question 7 - Taxation functions to create sellers of real goods and services, so that the government can spend its otherwise worthless currency.

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false

Question 8 - The cash rate is exogenous and is determined by the Central Bank.

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false

Question 9 - The size of the government is a political rather than an economic issue.

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false

Question 10 - The government can maintain full employment with price stability if it stands ready to employ all labour not required by the private sector at a fixed wage.

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false

Question 11 - Bond issues are not used to finance government spending but a rather used to provide a floor in the interest rate structure.

true
false