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The Weekend Quiz – May 7-8, 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. Assume inflation is stable, there is excess productive capacity, and the central bank maintains its current monetary policy setting. If government spending increases by $X dollars and private investment and exports are unchanged, then nominal income will continue growing until the sum of the change in taxation revenue, import spending and household saving rises by $X dollars.

2. The crucial difference between a monetary system based on the gold standard world and a fiat currency monetary is, that under the former system:

3. When the national government's fiscal balance moves into deficit:

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