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The Weekend Quiz – February 6-7, 2021

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. For a nation running a current account deficit, national income adjustments will ensure the government fiscal position is in deficit no matter what the government's intentions are if the private domestic sector is spending less than its income.

2. It would be impossible for a government to avoid issuing debt to the non-government sector when running a fiscal deficit while the central bank was targeting a positive short-term policy rate.

3. EMU member nations face solvency risk because they do not issue their own currency. This source of risk would not be eliminated if these nations exited the Eurozone and re-established their currency sovereignty - that is, issued their own floating currency.

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