Saturday Quiz – August 24, 2013

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 #231

• 1. Start from a situation where the external surplus is the equivalent of 2 per cent of GDP and the budget surplus is 2 per cent. If the budget balance stays constant and the external surplus rises to the equivalent of 4 per cent of GDP then:
• National income rises and the private surplus moves from 4 per cent of GDP to 6 per cent of GDP.
• National income falls and the private surplus moves from 4 per cent of GDP to 6 per cent of GDP.
• National income rises and the private surplus moves from 0 per cent of GDP to 2 per cent of GDP.
• National income remains unchanged and the private surplus moves from 0 per cent of GDP to 2 per cent of GDP.
• National income falls and the private surplus moves from 0 per cent of GDP to 2 per cent of GDP.
• 2. Taxes do not fund government spending but they do create unemployment.
• False
• True
• 3. Some progressives call for bank lending to be more closely regulated to ensure that all bank loans were backed by reserves held at the bank to stop another credit binge. However, financial market interests argue that this would unnecessarily reduce the capacity of the banks to lend and damage the economy. Both are wrong.
• False
• True

Sorry, quiz 231 is now closed.

You can find the answers and discussion here