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The Weekend Quiz – June 8-9, 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. The only way that you can have unbalanced external accounts across nations (some countries with surpluses and other deficits) is because the surplus countries desire to hold financial assets denominated in the currency of the deficit countries.

2. Like anything in abundance, it is true that when there is more "money" in the economy its value declines.

3. The imposition of a fiscal rule at the national government level that the fiscal account has to be in balance at all times would eliminate fiscal balance swings driven by the automatic stabilisers.

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    This Post Has 3 Comments
    1. Dear Bill,
      Surely there is a second way of having unbalanced external accounts – that is that deficit countries like to have surplus countries gaining stocks of their currency because the deficit countries then gain real trading advantage (ie the imported goods) over the surplus countries, just for the “paper money”. (I may have a logic malfunction!).

    2. 3/3 again! If you want to really ace Bill’s quizzes buy the textbook. Oh yeah that’s right- it sold out! That was the best bit of news I’d had in a long time. The idea of the progressives of the world up late at night pondering the multiplier formula by candlelight.

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