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The Weekend Quiz – August 12-13, 2017

Welcome to The Weekend 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. A central bank sets the short-run interest rate and can choose to pay any rate on excess reserves to the commercial banks that it chooses.

2. The Australian dollar has appreciated recently against many key currencies. This has squeezed some of export industries (such as manufacturing) which are not enjoying a commensurate growth in world demand for their products. A cut in real wages is needed to restore international competitiveness in the industries that are under pressure.

3. If the nation is running a current account deficit of 2 per cent of GDP and the government runs a surplus equal to 2 per cent of GDP, then we know that at the current level of GDP, the private domestic sector is spending less than it is earning.

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