The Weekend Quiz – October 1-2, 2016

Welcome to The Weekend Quiz, which used to be known as the Saturday Quiz! The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.

Quiz #393

  • 1. When the IMF and the OECD talk about structural fiscal deficits, you know their estimates are:
    • biased downwards thus indicating that the government fiscal stance is less expansionary than it actually is.
    • biased upwards thus indicating that the government fiscal stance is more expansionary than it actually is.
    • difficult to assess because their forecasts are subject to forecasting inaccuracy.
  • 2. When a sovereign government issues debt it logically:
    • increases the financial assets that are held by the non-government sector $-for-$.
    • has no impact on the overall holdings of financial assets held by the non-government sector $-for-$.
    • reduces the capacity of the private sector to borrow from banks because they use their deposits to buy the bonds.
  • 3. Historically, government debt has been used by central banks to manage liquidity and sustain positive short-term policy interest rates targets. This function necessitates that currency-issuing governments continue to, at least, issue enough debt to allow these open market operations to continue.
    • False
    • True

Sorry, quiz 393 is now closed.

You can find the answers and discussion here

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