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The Weekend Quiz – February 5-6, 2022

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. Bank lending moved from being reserve-constrained to capital-constrained once the prudential authorities relaxed reserve ratio requirements and the Bank of International Settlements introduced the Basel framework for capital adequacy.

2. By increasing tax rates a sovereign government increases its capacity to spend more without increasing inflation.

3. For a nation running a small external deficit, the government will always be in deficit if the domestic private sector is saving overall.

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