Saturday Quiz – January 17, 2015

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 #304

• 1. Over a given economic cycle (peak to peak), if a nation's external sector is on average balanced and the government surplus of tax revenue over its spending is, on average, equal to 1 per cent of GDP, then the private domestic sector's spending-income balance will on average be in:
• Deficit of 1 per cent of GDP
• Surplus of 1 per cent of GDP
• 2. The immediate expansionary impact of a tax cut, designed to generate $x revenue at the current level of national income, will be less than an increase of public spending cut of $x.
• False
• True
• 3. If the external sector is accumulating financial claims on the local economy (that is, providing foreign savings to the domestic economy) and the GDP growth rate is lower than the real interest rate, then the private domestic sector and the government sector can run surpluses without damaging employment growth.
• False
• True

Sorry, quiz 304 is now closed.

You can find the answers and discussion here