Saturday Quiz – November 30, 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 #245

• 1. The distinction between structural and the cyclical components of the final government balance helps us to determine the direction of the discretionary fiscal policy stance of the government. In that context, which of the following situations represents the more expansionary outcome:
• You cannot tell because you do not know the decomposition between the cyclical and structural components.
• A government deficit equivalent to 5 per cent of GDP
• A government deficit equivalent to 3 per cent of GDP
• 2. If private domestic investment is greater than private domestic saving and the current account is in deficit then the government balance has to be in deficit at all levels of GDP.
• False
• True
• 3. If the ECB uses "overt monetary financing" (OMF) to support the net public spending within the Eurozone, it would still require debt issuance if they wanted to target a non-zero policy interest rate.
• False
• True

Sorry, quiz 245 is now closed.

You can find the answers and discussion here