A little pop quiz to see how well you understood Modern Money in a Nutshell. For the first time, the comments section is open to everyone!
1. According to MMT, which of the following is true about dollars?
A) Dollars are reused once spent into existence.
B) Dollars are constantly being created and destroyed.
C) There is printing of money to create dollars.
D) Government spending is funded by tax revenue.
2. The national debt refers to:
A) The sum of all government budget deficits.
B) The total amount of dollars in existence.
C) Borrowing is required to fund government spending.
D) Unpaid taxes owed to the government.
3. Government spending:
A) Is limited by tax revenue.
B) Must balance the budget over time.
C) Is not funded by taxes.
D) Results in new dollars being created.
4. Taxation:
A) Provides revenue to fund government spending.
B) Is necessary for the government to obtain dollars.
C) Deletes dollars from the money supply.
D) Balances government spending over the long run.
5. According to MMT, reducing the government debt would:
A) Free up more dollars for private sector spending.
B) Reduce interest costs for the government.
C)Delete dollars from the economy and reduce the money supply.
D) Avoid burdening future generations with large debts.
6. MMT distinguishes between:
A) The federal government and state governments.
B) The private sector and the public sector.
C) Currency issuers and currency users.
D) Deficit spending and surplus spending.
Come back tomorrow for the answers!