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 – February 7, 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 #307
- 1. Whenever there is an external sector deficit, which is draining overall spending in the domestic economy, the private domestic sector (households and firms) can only save overall if the government sector runs a deficit or balances its fiscal position.
- False
- True
- 2. The debt issued by a currency-issuing government in its own currency is not really a liability because the government can just roll it over continuously and thus they never have to pay it back. This is different to a household, which not only has to service its debt but also has to repay them at the due date.
- False
- True
- 3. The Greek crisis would be significantly eased if it could improve its tax collection arrangements to ensure that it had more financing available to cover its spending.
- False
- True
Sorry, quiz 307 is now closed.
You can find the answers and discussion here
Dear Bill,
Not a reply on the quiz. I have been reading and trying to understand MMT and am getting there (I think).
To be unashamedly political here, I assume that when the Federal Treasures endlessly declares we have a “debt and deficit disaster” and prattles on about having pay $100M/day to “fund” the deficit it is all just nonsense designed to “scare the horses” and as excuse to introduce austerity measures or as an excuse to privatise government assets ?
A related question: are we borrowing from foreigners or mainly from domestic banks? I ask as a similar mantra is something like ” foreign banks may refuse to lend at some point unless we get back into surplus.
Bill, I’ve enjoyed some of your insights into the voodoo economics of the looney right and I think those insights would be valuable to the great majority of people in Australia who feel that something is not quote right. Hence they chucked out the likes of Newman and soon to be the debunked Abbott. But we need simple messages to enable those concerned Australians to understand the nonsense rhetoric of the IPA schoolboys, LNP and the out of step reserve bank. In Australia you are leading this charge but need to get your message out to a wider audience. As private debt is almost ignored by the poly set in Canberra I would like to get your thoughts on the resurrection of the Chicago plan as a partial solution to our current mess.