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The Weekend Quiz – July 28-29, 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 we observe rising yields on 10-year government bond yields then we can safely conclude that bond investors are demanding increased risk premiums for these assets.

2. If a nation that is running an on-going external deficit is to avoid a recession, then the government spending (relative to taxation) has to rise if the household saving ratio rises.

3. While a currency-issuing government does not have to issue debt to fund its deficit spending, the debt-issuance does reduce the inflation risk associated with the deficits.

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    This Post Has 2 Comments
    1. 2 out of 3 again. Q2 wrong! And I thought I got the sectoral balances! (Hmm, i think I know now what you did there , Bill.)

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