Saturday Quiz – September 13, 2014

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 #286

• 1. Modern Monetary Theory accepts the proposition that if the central bank continually expands the monetary base then there will inevitably be an accelerating inflation.
• False
• True
• 2. If there is an external deficit of 2 per cent of GDP and the government balances its fiscal position then private capital formation:
• Cannot really tell definitively without further information.
• will be less than private domestic saving by a margin equal to 2 per cent of GDP.
• will outstrip private domestic saving by a margin equal to 2 per cent of GDP.
• 3. While a currency-issuing government does not need to issue to debt in order to raise funds prior to spending, one effect of draining funds out of the system by borrowing from the private sector is that it reduces the risk that public spending will overheat the economy.
• False
• True

Sorry, quiz 286 is now closed.

You can find the answers and discussion here