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The Weekend Quiz – June 20-21, 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. If the current account (on balance of payments) is in deficit and household saving increases as a proportion of disposable income then the government could still run a fiscal surplus without a decline in output and income occurring.

2. Politics aside, the central bank can still increase interest rates even if it was legislatively required to directly purchase treasury debt to match the national government’s fiscal deficit.

3. Domestic deflation (reducing domestic wages and prices relative to other nations), which Eurozone nations are prone to pursue because they have no exchange rate flexibility, may not increase export competitiveness.

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