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Saturday Quiz – May 14, 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. As long as employment growth keeps pace with labour force growth, unemployment will not rise.

2. When a government issues debt it creates more non-inflationary space for itself to spend than if it spent without issuing debt.

3. The non-government sector is wealthier when the government matches it deficit with new debt issues.

4. If net exports are running at 2 per cent of GDP, and the private domestic sector overall is saving an equivalent of 3 per cent of GDP, the government must:

5. Premium Question: Fiscal austerity programs (which try to create primary budget surpluses) are likely to thwart the chances of a government reducing its public debt as a proportion of GDP because they are likely to reduce real GDP growth which, then drives the budget deficit up via the automatic stabilisers.

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    This Post Has One Comment
    1. Q2, you did not specify a time period.

      Did you mean “When a government issues debt, it creates more non-inflationary space for itself to spend IN THE PRESENT than if it spent without issuing debt.”?

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