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 – August 13, 2011
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 six questions. Your results are only known to you and no records are retained.
Quiz #125
- 1. In the recent British riots, a common claim has been that the rioters were unemployed youth on income support benefits who were living off the hard work of those who pay taxes. This claim has validity.
- False
- True
- 2. The automatic stabilisers operate in a counter-cyclical fashion and ensure that the government budget balance, which rises during a recession, returns to its appropriate level once growth resumes.
- False
- True
- 3. A potential problem with running continuous budget deficits is that the spending builds up over time which adds to inflationary pressures.
- False
- True
- 4. In recent days we have observed falling government bond yields in most non-EMU nations which suggests that investors are viewing sovereign debt less favourably since the downgrading of the US rating.
- False
- True
- 5. Premium Question: If private domestic investment is less than private domestic saving and the current account is draining aggregate demand then the government budget has to be in deficit no matter what level of GDP is produced.
- False
- True
Sorry, quiz 125 is now closed.
You can find the answers and discussion here
Question 1. The Claim is
a)that the rioters were unemployed youth . Mostly True
b)on income support benefits . Mostly True
c)living off the hard work of those who pay taxes. False
The Question is The Claim(s) has validity.
I have answered claim c) as False because from a MMT view taxes do not relate to income support benefits.
So the answer is False.
Question 5
I would have thought if private investment > savings then the government sector could be either in surplus, deficit or balanced no matter what is happening in the external sector.
Bazz – I think the point is that benefit claimants are utilising real resources produced by workers, who pay tax. So they are still “living off the work of others” even though the tax payments in no way fund the payment of benefits.
Yeah! I got the first two wrong and the last three right!
“Lewis MacKenzie says:
Saturday, August 13, 2011 at 23:09
Bazz – I think the point is that benefit claimants are utilising real resources produced by workers, who pay tax. So they are still “living off the work of others” even though the tax payments in no way fund the payment of benefits.”
From that point of view i agree, thanks for the feedback Lewis.