Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern…
Saturday Quiz – January 1, 2011
Welcome to the Welcome to 2011 edition of 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 six questions. Your results are only known to you and no records are retained.
Quiz #93
- 1. A rising budget deficit indicates an expansionary shift in government policy and the challenge is to ensure the nominal demand stimulus does not exceed the real capacity of the economy to respond by increasing real output.
- True
- False
- 2. The imposition of taxes by the national government creates unemployment, other things equal.
- True
- False
- 3. Under current institutional arrangements, the change in the ratio of public debt to GDP will exactly equal the primary deficit plus the interest service payments on the outstanding stock of debt both expressed as ratios to GDP.
- True
- False
- 4. When economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government budget balance returns to its appropriate level.
- True
- False
- 5. In a modern monetary economy the monetary base always adjusts to the changes in the money supply.
- True
- False
- 6. Special bonus question: Santa Claus has gone home to:
- Santa Claus doesn't have a home.
- Not sure because we were asleep when he was around.
- The North Pole where he lives with his partner and some elves.
Sorry, quiz 93 is now closed.
You can find the answers and discussion here
6 out of 6! getting the hang of this thing
Unfortunately I haven’t been able to keep up with your posts. Talk about prolific! I would like to hear from you how to manage that kind of output. Years of writing?
I got question 1 wrong :(. Honestly I didn’t understand the question (I don’t know what “real capacity” and “real output” are). However, it seemed to be describing the caution (the challenge) that governments must face when going into deficit to provide stimulus to the economy, that they don’t “stimulate too much” and cause some kind of economic damage (like inflation). But no. Maybe I am misunderstanding the question. Perhaps it’s less of a challenge because the idea is that they ought to simply print up the money rather than go into deficit?
Enjoying your blog.
Cheers!
Steve.