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Saturday Quiz – November 28, 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. People are richer they purchase bonds that the government issues to match its net deficit spending relative to a situation where the government just instructed the central bank to ensure all public spending cleared the payments system.

2. The sectoral balances perspective of the national accounting framework tells us that the private domestic sector cannot save if a nation’s external sector is in balance and the government runs a balanced fiscal position (government spending equals its revenue).

3. The so-called 'progressives' tend to argue that if austerity is to be imposed it is better to increase taxes (particularly on high income earners). Conversely, 'conservatives' demand spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?

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    This Post Has 2 Comments
    1. Well done Mark-I’m around 66% and struggling with the cognitive challenge of getting the whole picture-I think I need another year of reading this blog and large doses of Mosler and Wray.

      Many thanks to Bill for this educational initiative and constantly repeating the accounting identities that, hopefully, will sink in and be retained!

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