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The Weekend Quiz – March 30-31, 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. Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.

2. For a nation running a current account deficit, income adjustments will ensure government fiscal position is in deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.

3. Higher levels of taxation permit the government to increase its real spending.

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    This Post Has 7 Comments
    1. Crap, reading too many of the “criticisms” of MMT made me daft and miss two questions. I may link to this questionnaire as an example of how there’s a lot more to it than “deficits don’t matter”.

    2. “2 outa 3 again! Q1 wrong. Sigh.”

      But why.

      [Bill edited out spoiler hints – please leave your conjectures until after everyone has had a chance]

    3. It’s Q3 three that did me in.

      I forgot that although taxes don’t fund spending, they do free up resources for the government to buy.

    4. Philip R – generally, what can make these questions tricky is that macroeconomics requires thinking about different ramifications. The tendency to think in binary terms often results in misunderstanding. This often catches me out.

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