Here are some statements about the economy and government money for you to test your knowledge.

Question 1

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

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Question 2

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

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Question 3

The national government borrows money from the private sector to finance the budget deficit

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Question 4

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

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Question 5

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

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Question 6

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