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 – December 21, 2013
Welcome to the It’s almost Xmas 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 #248
- 1. A public works program that digs holes and fills them in again has exactly the same impact on current economic growth ($-for-$) as a private investment plan which constructs a new factory.
- False
- True
- 2. Economists note that the automatic stabilisers in the government's budget increase deficits (or reduce surpluses) in times of slack aggregate demand. This sensitivity of the budget outcome to the business cycle could be eliminated if the government followed a fiscal rule such that it had to balance its budget at all times.
- False
- True
- 3. It is clear that the central bank can use balance sheet management techniques to control yields on public debt at certain targetted maturities. However, this capacity to control the term structure of interest rates is diminished during periods of high inflation.
- False
- True
- 4. Special Santa Question: Santa is having trouble keeping his sled and related delivery infrastructure in working order. But he knows
- (c) Dear Bobby or Sally, there comes a time when we come of an age where we should know the truth about Santa.
- (b) he has been told that the household budget is equivalent to the government fiscal balance and he understands the currency-issuing government has no financial constraints so he cannot work out why suppliers won't just accept his cheques.
- (a) that he is a household and thus a user of the currency and will have to save, earn or borrow to generate the funds necessary to maintain his equipment.
Sorry, quiz 248 is now closed.
You can find the answers and discussion here
If we assume that Santa’s Workshop is located at the North Pole (presumably built on a slab of sea ice that’s moored to the seafloor to prevent the Workshop from drifting too far from the Pole), then, according to current international law, there are no legitimate territorial claims on the Workshop. Thus, it probably makes no sense to consider Santa a household.
So what do we know about Santa and the North Pole? For one thing, he’s alleged to have an army of slave labor at his disposal, though it could well be the case that Santa issues some currency that he then taxes (in the classic Columbus move) in order to keep the elves in line without having to actually maintain slavery. We also know that the Arctic region is very resource-rich; for example, the USGS estimates that up to 22% of global oil and natural gas deposits could be beneath the ocean. Assuming that Santa needs resources from other countries (e.g., heavy metals for all those electronics he gives away), then it could be the case that Santa is an oil exporter to, say, Russia or China.
It seems this leaves Santa primarily with exchange rate concerns, though since Santa’s currency doesn’t (to my knowledge) exist on forex markets, he probably doesn’t allow imports to be paid for in North Pole Bucks, at which point I guess one gets in a roundabout manner back to the Workshop being a user of foreign currency, at least when it comes to importing resources required to build capital or produce toys.
I was under the impression that Santa was a benevolent communist dictator who uses his empathy and wisdom to guide the juvenile elves into doing things which generate them net benefits through meeting the aggregate demand of spoilt western children everywhere (and thus generating some more “culturally appropriate” potential world leaders for this insane asylum we call the civilised world). He’s most likely a closed economy with mining, drilling, manufacturing, and the most intelligent method of distribution the world has attempted yet,(and that’s ALMOST not a joke) having no real need to operate any retail type distribution, this decreases the productive hours needed from each elf weekly to 24, freeing up time for them to pursue more meaningful lives. If they want something, they simply ask Santa for their needs and he gives them anything within reason. He knows they need not golden toilet seats and private jets and half-acre homes and Ferraris so he doesn’t make them waste any time manufacturing them. He knows that technological standardization and automation and a manufacturing process based on upgradeability, longevity and recyclability leads to higher standards of living for all (alongside renewable energy generation and storage).
some of his philosophy i agree with, other parts i find rather dubious since most of the crap he defactes onto the world every 12 months is in landfill seeping poison within 90 days of delivery.
Santa’s biggest worry is not money…… it’s ICE!
Damn it! I didn’t read q1 properly: “current” is the operative word.