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The Weekend Quiz – May 30-31, 2020

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 an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors (government and private domestic) ends up spending less than they receive, irrespective of the GDP growth rate.

2. Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its "own currency" debt obligations and never has to pay them back.

3. Standing facilities (credit lines etc) that central banks maintain means that the monetary base always adjusts to the changes in the money supply.

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