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 – February 25, 2012
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.
- 1. If a nation's external sector is in balance (and thus making no contribution to real GDP growth) then the private domestic sector cannot save overall if the government runs a balanced budget.
- 2. A tax increase, which aims to increase tax revenue at the current level of national income by $x, will have a smaller initial negative impact on aggregate demand than a government spending cut of $x?
- 3. During a recession, a government should use expansionary fiscal policy to restore trend real GDP growth if it wants to reduce unemployment rate.
- 4. In many nations, private households are increasing their saving ratios (from disposable income) and firms are declining to invest. These trends indicate that budget deficits have to be higher to avoid further employment losses.
- 5. Premium Question: If the external sector is accumulating financial claims on the local economy and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
Sorry, quiz 153 is now closed.
You can find the answers and discussion here
This Post Has 5 Comments
bah! My worst ever score 1/5. I am going to hide under the table and cry.
3 and 4 wrong. I guess I know why – I should have read the questions more carefully.
3 & 4 got me as well
Me too (3 and 4 wrong)…
Only now can I see the trip wires.
Maybe not yet time to be thinking of ditching the Saturday Quiz, Bill.
I’m going to blame my other half playing her violin at full blast while I’m trying to do the quiz.
Those things are loud