Saturday Quiz – November 15, 2014

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 questions. Your results are only known to you and no records are retained.

Quiz #295

  • 1. During a recession, a government should use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment rate.
    • False
    • True
  • 2. The current period is marked by private households increasing their saving ratios (from disposable income) and firms declining to invest. These trends indicate that fiscal deficits have to be higher to avoid further employment losses.
    • False
    • True
  • 3. If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
    • False
    • True

Sorry, quiz 295 is now closed.

You can find the answers and discussion here

This Post Has One Comment

  1. definition problem alert!!
    1]Obviously an “expansionary fiscal policy” doesn’t mean running a government deficit, which seemed to me to mean the government is spending currency! So what the bloody hell does that phrase mean?
    2] same again. If households stall spending and firms decline to invest don’t we need to government to pick up the slack?

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