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Saturday Quiz – March 7, 2015

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.

1. If the government increases its fiscal deficit as a percentage of GDP it will always squeeze the real resources available for private productive uses.



2. For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.



3. A currency-issuing government can avoid issuing debt to the private sector when running a fiscal deficit even if the central bank is targeting a positive short-term policy rate.





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    This Post Has One Comment
    1. Sorry for my English.
      Suppose that Greece decides to leave Euro. I would like to stay only in the trade deficit and here is my question. Greece, let us suppose, that is going to face trade deficit sooner or later.
      We know imports are real benefits and exports are real costs. Trade deficits directly improve our standard of living. On the other side Greece has to pay in dollars or Euro this deficit. It is not like USA that it runs deficit but its monetary unit is acceptable by the rest of the world. What happen in this case??
      Spyros

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