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…
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.
- 1. Which scenario represents a more expansionary outcome:
(a) A budget deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 3 per cent of GDP).
(b) A budget deficit equivalent to 3 per cent of GDP.
(c) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (B)
- Option (c)
- Option (b)
- Option (a)
- 2. When the government matches an increase in deficit spending with debt issued to the private sector, the growth in aggregate demand is less than would be the case if the government didn't borrow.
- 3. Fiscal austerity (manifesting as a budget surplus) will not to damage economic growth if the external balance is in surplus.
- 4. If the central bank regulated that banks have to hold reserve equivalent to their outstanding loans this would restrict lending.
- 5. Premium Question: In the context of population ageing, the fact that a sovereign government is never financially constrained means that it can always provide first-class health care to its citizens.
Sorry, quiz 127 is now closed.
You can find the answers and discussion here