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The Weekend Quiz – November 19-20, 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.

1. When a sovereign government issues debt it logically:




2. Only one of the following statements is definitely true when you observe rising government bond yields for new issues:




3. Open market operations as a means of ensuring that levels of bank reserves are consistent with the policy interest rate target becomes redundant if the central bank pays a positive interest rate on overnight reserves held by the commercial banks (ignore any reserve requirements in place when answering).






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    This Post Has 2 Comments
    1. I thought 3. was true. Perhaps it depends on the target rate, and whether it’s the same as the rate of interest on reserves or not (but I thought it always was). Will be interesting to see the solution.

    2. Yes, you are right. For 3 to be “true” the support rate on reserves should be equal to the policy rate, but it only says the support rate is positive, so we don’t know.

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