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The Weekend Quiz – February 27-28, 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. When a nation is generating large external surpluses, it can create more space for non-inflationary spending in the future if the government runs fiscal surpluses and accumulates them in a sovereign fund.

2. When output gaps are based on the concept of the NAIRU (Non-Accelerating-Inflation-Rate-of-Unemployment), the estimates produced will usually lead one to conclude that a government's discretionary fiscal position is more expansionary than it actually is.

3. A nation can run a external deficit accompanied by a larger government sector surplus (expressed as a percentage of GDP), while the private domestic sector is spending less than they are earning.

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