Saturday Quiz – November 1, 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 #293

• 1. A declining budget deficit tells us that the government is pursuing a more contractionary fiscal policy stance.
• False
• True
• Cannot tell as we need more information on what the external sector is doing.
• 2. If the household saving ratio rises and there is an external deficit then government must increase its fiscal deficit to fill the private spending gap or else national output and income will fall.
• False
• True
• 3. When a currency-issuing government voluntarily constrains itself to borrow from the private sector to cover its net spending (deficits) position, it substitutes public spending for the borrowed private funds and reduces the funds available for private sector borrowing.
• False
• True

Sorry, quiz 293 is now closed.

You can find the answers and discussion here