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Saturday Quiz – January 2, 2016

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. Issuing government debt reduces the risk of inflation arising from deficit spending because the private sector has less money to spend.

2. A nation can export less than the sum of imports, net factor income (such as interest and dividends) and net transfer payments (such as foreign aid) and run a government sector surplus of equal proportion to GDP, while the private domestic sector is spending more than they are earning.

3. If a government wants to reduce the public debt ratio, then it has to eventually run primary fiscal surpluses (that is, spend less than they raise in taxes).

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