The Weekend Quiz – March 11-12, 2017

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 #416

  • 1. If the national accounts of a nation reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP, then we know that national income adjustments would ensure that the fiscal balance was in:
    • Deficit equal to 1 per cent of GDP.
    • Surplus equal to 1 per cent of GDP.
    • Deficit equal to 5 per cent of GDP.
    • Surplus equal to 5 per cent of GDP.
    • None of the above.
  • 2. Even though a government that issues its own fiat currency is not revenue constrained, it is still correct to say that recipients of income support provided by such a national government live off the hard work of those who pay income taxes.
    • False
    • True
  • 3. There is no difference in terms of the government's impact on aggregate demand, between the government matching its deficit spending with bond issues to the non-government sector and the situation where the government instructed the central bank to buy its bonds to match the deficit.
    • False
    • True

Sorry, quiz 416 is now closed.

You can find the answers and discussion here

This Post Has 3 Comments

  1. 3 out of 3!! Woohoo!

    (And I got the maths question right in the Captcha!)

  2. 2. Even though a government that issues its own fiat currency is not revenue constrained, it is still correct to say that recipients of income support provided by such a national government live off the hard work of those who pay income taxes.

    Hard work – does that mean digging 100 holes or convincing someone else they need to buy those 100 holes?

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