skip to Main Content

Saturday Quiz – April 25, 2009

Welcome to the billy blog Saturday quiz. The quiz tests whether you have been paying attention over the last seven days.

Given this is April 25 – I pause to recognise the commitment and personal sacrifices made by our past (brave) generations in various wars however misplaced their logic was under the colonial smokescreen.

Back to the quiz! See how you go with the following five questions. Your results are only known to you and no records are retained.

The Australian (or US, for that matter) government's net spending is




While it is likely that the GDP (output) gap will be around 5 per cent this year, the national government's capacity to fill this gap




From the perspective of aggregate demand, creating a minimum wage private sector job




If the Government introduced a permanent Job Guarantee (offer of minimum wage job to anyone who wanted it) then




The losses that the Futures Fund (or any sovereign fund) has made on its share holding






Spread the word ...
    This Post Has 6 Comments
    1. Why would offering a minimum wage job to everyone have no implication on aggregate demand in the future? I said I thought it would have been higher because more people would be employed.

    2. Hmm. I can keep getting 4 and 5 out of 5 without referring back to the weeks posts yet I still have trouble wrapping my head around some concepts.

      Ah well, keep plugging away. If you ever stop learning, it’s for one reason only – it’s because you’re dead.

    3. Dear K

      I guess you are referring to Question 4 and the option that you presumably chose is “it would mean that aggregate demand would always be higher than otherwise.” The correct answer as you now realise is “it would have no inevitable implications for future deficits or aggregate demand levels.” The reason is that the Government could run surpluses and have a very harsh contractionary fiscal and monetary policy yet still run a Job Guarantee. While this would be stupid the point of the question is to separate the issues of levels of aggregate demand from the JG policy. An offer of a minimum wage to anyone who wants it will obviously boost the incomes of those employed but it could be brought in as the current generally is cutting back. If you want more in depth analysis of this you might like to read an article I wrote with Randy Wray in the the Journal of Economic Issues (a US academic journal) in 2005 (last edition of that year). It explains why a JG approach is not the same as a Keynesian fiscal expansion, which can, in some situations, be inflationary.

      best wishes
      bill

    4. Dear Lefty

      The point is that even a neo-liberal should be able to support a Job Guarantee given that it could be run with generalised cutbacks elsewhere. Not that I recommend that.

      best wishes
      bill

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Back To Top