Saturday Quiz – December 20, 2014
Welcome to the 300th Edition of 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.
Hah, I screwed up question 2 because I thinkoed the meaning of “wealth” – government bonds worth x dollars are exactly as valuable (personal wealth wise) as real estate worth x dollars. You can’t live in them, though . . .
How does government issuing bonds change anything about the total amount of private realestate?
They key part is “private sector wealth is invariant” – ie. it doesn’t change. All that happens when the government issues bonds and private sector entities buy them is that wealth stored in the bank accounts of those entities is transferred into government bonds of the same value – no wealth is ccreated or destroyed, it’s just shifted to a different form.
oh, you thought government bonds were real wealth as opposed to financial wealth. the statement doesn’t say anything about the composition of the wealth though.