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The Weekend Quiz – July 31-August 1, 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. Larger fiscal deficits as a percentage of GDP mean that there are less real resources available for other productive uses.

2. For a nation running an external deficit, income adjustments will ensure government will record a deficit if the domestic private sector seeks to increase its saving overall as a percentage of GDP.

3. The payment of a positive return on overnight reserves held by the commercial banks equal to the current policy rate will tend increase the overall level of reserves held by the latter (ignore any reserve requirements).

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