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The Weekend Quiz – May 4-5, 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. Workers enjoy real wage increases when the rate of growth in earnings outstrips labour productivity growth.

2. Quantitative easing aims to stimulate aggregate spending by reducing long-term investment rates whereas fiscal deficit stimulate aggregate spending via tax cuts or direct public spending. Both policies ultimately work by increasing the net financial assets held by the non-government sector.

3. An understanding of Modern Monetary Theory (MMT) leads to the conclusion that a central bank could still increase interest rates even if the government instructed it to directly purchase treasury debt as an accompanying operation to the government’s fiscal deficit.

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