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Saturday Quiz – April 10, 2010

Welcome to the billy blog Saturday quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following five questions. Your results are only known to you and no records are retained.

1. The statement that lending is capital-constrained rather than reserve constrained would not apply if the banks had to maintain a reserve ratio of 100 per cent.



2. Any person on income support benefits provided by the national government are living of the hard work of those who pay taxes. We consider this is part of being a civilised society.



3. A central bank can influence bank lending by charging an increasing price for providing its reserves to the commercial banks while maintaining its target monetary policy rate.



4. Has been withdrawn!



5. While a national government that issues its own currency is not revenue-constrained it is possible that the demands on the budget posed by the need to provide pensions and health care to an increasing proportion of the population will be impossible due to inflation.





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    This Post Has 5 Comments
    1. the way you worded question 5 seemed confusing for confusion’s sake. inflation has had different connotations in your blog then real resource constraints. not to mention that said inflation may be supply side and caused by imperfect competition/oligopolies/monopolies and not money demand from non-consumer=good-producing people.

    2. I had trouble with the wording on Q4. Unfilled vacancies? Unfilled means empty. Vacant means empty. What is empty emptiness? And what is falling empty emptiness?

    3. @ markg:

      Dictionary definitions are not enough to interpret normal language use. Language use is too varied for simple, concise definition. Context matters. Here I think it is a question of timing. A vacancy is not just an emptiness. It is an opening, something that has become empty. The normal expectation is that a vacancy will become filled. An unfilled vacancy is one that defies that expectation. That is, the time by which it normally would have been filled has passed.

      I think that “fall” is a typo for “fill”. Or else Bill wrote that question late at night. ;) And meant to say, “If the number of vacancies falls faster than the number of people getting hired increases.”

      But that doesn’t make sense, either, does it? The number of people filling vacancies cannot exceed the number of people getting jobs. Perhaps he meant that the number of people filling vacancies plus the number of people getting new jobs is less than the number of people losing jobs. But, of course, if you lose a job you normally create a vacancy. Anyway, is that vacancy counted among the “unfilled vacancies”? Or perhaps you have been “downsized”, so that a vacancy is not created. Also, is Bill talking about absolute numbers, or about percentages?

      Now, I expect that “overall employment” is well defined for economists. But it is ambiguous to laymen. {shrug}

    4. Correction:

      I said, “Perhaps he meant that the number of people filling vacancies plus the number of people getting new jobs is less than the number of people losing jobs.”

      I meant, “Perhaps he meant that the number of people getting new jobs (i. e., not filling vacancies) is less than the number of people losing jobs.”

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