The Weekend Quiz – March 5-6, 2016

Welcome to The Weekend Quiz, which used to be known as the 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. The mainstream macroeconomics conception of the banking system characterised by the concept of the money multiplier posits that changes in the monetary base are driven by changes in the money supply.

2. If the nation is running a current account deficit which is accompanied by a government sector surplus of equal size, then the private domestic sector will always be spending more than its income.

3. With the Eurozone nations unable to gain competitive relief via nominal exchange rate adjustments the hope is that by deflating wages and prices real unit labour costs will fall. Assuming other nations do nothing and wages and prices in one nation fall at the same rate, then a real exchange rate depreciation (relative to other nations) requires labour productivity and employment growth to rise.

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