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The Weekend Quiz – January 26-27, 2019

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

1. When a government such as the US government voluntarily constrains itself by issuing debt to match $-for-$ its net spending position (deficit), it reduces the funds available to the non-government sector for their own spending.

2. When the national government's fiscal balance moves into surplus:

3. If the external balance remains in surplus, then the national government can run a fiscal surplus without impeding economic growth.

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    This Post Has 7 Comments
    1. Got the third wrong. I was thinking in terms of sectoral balances. Wouldn’t the magnitude of the external and government fiscal surplus have to taken into consideration? If the governments surplus is massive and the external one only marginal, wouldn’t that be contractionary?

    2. @Hermann,


      I assumed Q3 was probably a trick question for precisely the reasons you mention.

      Oh well, as the song says: “Two Out of Three Ain’t Bad”!

    3. Same thing as Hermann and Mr. Shigemitsu, thought it was one of those ‘not enough information to conclude’ type questions.

      perhaps we get too ‘clever’ for our own good at times!

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