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The Weekend Quiz – May 12-13, 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 a nation has an external deficit and household saving increases as a proportion of disposable income then the government cannot run a fiscal surplus without output falling.

2. Politics aside, the US central bank could still increase interest rates even if the US government instructed it to directly purchase treasury debt to facilitate the national government’s fiscal deficit.

3. A continuous fiscal deficit leads to public spending building up which while not a problem in the short-run, increases the long-run inflation risk faced by the economy.

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    This Post Has 2 Comments
    1. 3/3 baby! On fire this week. Learnt a lot about the external aspect. Re-reading a lot of old blogs is helping I find. What a great resource the archive is.

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