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The Weekend Quiz – April 21-22, 2018

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. If the real interest rate (difference between nominal interest rate and inflation) is constant, then a currency-issuing government, which matches its net spending $-for-$ with debt issuance, could double its fiscal deficit without pushing up the public debt ratio.

2. A government in any nation that achieves positive net exports can push for a primary fiscal surplus knowing it will not compromise growth.

3. Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $X dollars and private investment and exports remain unchanged.

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    This Post Has 5 Comments
    1. Two out of three ain’t bad…
      Sounds like a song, so there is hope that this stuff is sinking in…
      Thanks for all your work Bill, it is appreciated .. :)

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