Saturday Quiz – April 18, 2009

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.

Quiz #5

• In February 2009, the unemployment rate was 5.7 per cent. If over the next 12 months GDP growth is -1 per cent (as expected), and the labour force growth slows to 1.6 per cent per annum and labour productivity growth is a flat 0.5 per cent per annum, then we would expect the unemployment in February 2010 to be approximately
• 6.8 per cent.
• 7.8 per cent
• 8.8 per cent
• Norway has a lower unemployment rate than Australia
• because its public sector is larger.
• because it consistently maintains a smaller gap between aggregate demand and potential output.
• because it has a smaller population and thus has to generate fewer jobs overall.
• Aiming at some budget deficit target (as outlined in the Government's Updated Economic and Fiscal Outlook for the 2008-09 Federal Budget) is futile because
• national government should maintain full employment.
• the automatic stabilisers are driven by private economic decisions.
• the national government can always finance its own spending.
• The rising budget deficit will only become a problem
• it will never be a problem because the national government is sovereign in its own currency.
• if it exceeds the non-government sector's nominal desire to save in the currency of issue.
• if the non-government sector eventually stops buying the debt that the Government is issuing.
• The latest data shows that Australians have on average lost more than 12 per cent of their real wealth in the last year as a result of the GFC. This means
• that it will be neither harder or easier for the country as a whole to provide health care to our ageing population in the future.
• that it will harder for the country as a whole to provide health care to our ageing population in the future only if the wealth doesn't grow again.
• that it will harder for the country as a whole to provide health care to our ageing population in the future.

Sorry, quiz 5 is now closed.

scroll down to find the answers and explanation below.

Quiz #5 answers

• In February 2009, the unemployment rate was 5.7 per cent. If over the next 12 months GDP growth is -1 per cent (as expected), and the labour force growth slows to 1.6 per cent per annum and labour productivity growth is a flat 0.5 per cent per annum, then we would expect the unemployment in February 2010 to be approximately

Answer: 8.8 per cent

Explanation: Please see Time to get real its bad! or post a question via the Comments.

• Norway has a lower unemployment rate than Australia

Answer: because it consistently maintains a smaller gap between aggregate demand and potential output.

Explanation: Please see Norway colder than us but for further details or post a question via the Comments.

• Aiming at some budget deficit target (as outlined in the Government's Updated Economic and Fiscal Outlook for the 2008-09 Federal Budget) is futile because

Answer: the automatic stabilisers are driven by private economic decisions.

Explanation: Please see The green shoots of recovery been looking! for further details or post a question via the Comments.

• The rising budget deficit will only become a problem

Answer: if it exceeds the non-government sector's nominal desire to save in the currency of issue.

Explanation: Please see Size of Deficit 101 for further details or post a question via the Comments.

• The latest data shows that Australians have on average lost more than 12 per cent of their real wealth in the last year as a result of the GFC. This means

Answer: that it will be neither harder or easier for the country as a whole to provide health care to our ageing population in the future.

Explanation: Please see Social security insolvency 101 for further details or post a question via the Comments.