Saturday Quiz – December 3, 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 questions. Your results are only known to you and no records are retained.

Quiz #141

• 1. When an economy is running a current account deficit, national income movements will ensure that only one of the two remaining sectors can spend less than they receive, irrespective of the GDP growth rate.
• False
• True
• 2. Unlike a household which not only has to service its debt obligations over the course of the loan but also has to repay them at the due date, a national government debt, which issues its own currency can always roll over its "own currency" debt obligations and never has to pay them back.
• False
• True
• 3. Standing facilities that central banks maintain means that the monetary base always adjusts to the changes in the money supply.
• False
• True
• 4. A redistribution of national income towards profits occurs when nominal wages growth lags behind the inflation rate.
• False
• True
• 5. Premium Question: While Modern Monetary Theory (MMT) indicates there is no particular economic or financial significance of a rising public debt ratio for a sovereign currency-issuing nation it recognises the political constraints that governments operate within. Accordingly, it recognises there is a trade-off between the need to run budget surpluses to reduce the public debt ratio and the political problems that austerity brings.
• False
• True

Sorry, quiz 141 is now closed.

You can find the answers and discussion here