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The Weekend Quiz – June 6-7, 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. The private domestic sector can save overall even if the government fiscal balance is in surplus as long as net exports are positive.

2. When the central bank purchases government bonds in the secondary bond market, it has the equivalent impact on financial assets in the non-government sector as if a fiscal deficit, which increased reserves by the same amount would have.

3. While continuous national governments deficits are possible if the non-government sector desires to save overall, they do imply continuously rising public debt levels under current institutional arrangements.

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