Weekend Quiz – March 19-20, 2022 – Bill Mitchell – Modern Monetary Theory

5. If you observe the following, which of the following are consistent with a stable level of GDP?

(a) The government deficit is $10 (spending is greater than the tax), household savings is $20, import spending is $20, total investment spending is $20, and export sales are $10. Unemployment is 10%.
(b) The government deficit is $15 (spending more than taxes), household savings is $20, import spending is $20, total investment spending is $15, and export sales are $15. Unemployment is 5%.
(c) The government deficit is $10 (spending is greater than tax revenue), household savings is $15, import spending is $20, total investment spending is $10, and export sales are $10. Unemployment is 12%.
(d) The government deficit is $10 (spending is greater than the tax), household savings is $20, import spending is $20, total investment spending is $20, and export sales are $15. Unemployment is 10%.