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Saturday Quiz – January 29, 2011

Welcome to the billy blog Saturday quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following six questions. Your results are only known to you and no records are retained.

1. A fact that is overlooked by those promoting austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion to ensure that the government budget balance returns to its appropriate level.

2. From a monetary perspective, it would be impossible for a central bank to directly purchase Treasury debt to facilitate a national government's budget deficit while still targeting a non-zero policy rate.

3. When a sovereign government issues debt it logically:

4. Rising government bond yields for new issues indicate:

5. Premium question: If private households and firms decide to lift their saving ratio the national government has to increase its net spending (deficit) to fill the spending gap or else economic activity will slow down.

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