Modern Money: the way a sovereign currency works.

Take the quiz! Which of the following statements are true or false?

Go through the statements, write down your answer. Answers and explanations in the video.

1. Just like a household, the government has to finance its spending out of its income or through borrowing.

2. The role of taxes is to provide finance for government spending.

3. The National Government borrows money from the private sector to finance the budget deficit.

4. By running budget surpluses the government takes pressure off interest rates because more funds are then available for private sector investment projects.

5. Persistent budget deficits will burden future generations with inflation and higher taxes.

6. Running budget surpluses now will help build up funds necessary to cope with the ageing population in the future.



Transcript will be coming later, if speech is not comprehensible.