Saturday Quiz – August 22, 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 #335

  • 1. As a matter of accounting, the financial assets held by the non-government sector rise $-for-$ when a sovereign government issues debt to the private bond holders.
    • False
    • True
  • 2. In a fiat monetary system (for example, US or Australia) with an on-going external deficit that exceeds the public deficit (expressed as percentages of GDP), the domestic private domestic sector cannot reduce its overall debt levels by increasing its net saving without incurring income losses.
    • False
    • True
  • 3. The imposition of fiscal rules which aim to limit the discretionary capacity of governments to net spend bias fiscal policy towards counter-cyclical responses when private spending is weak.
    • False
    • True

Sorry, quiz 335 is now closed.

You can find the answers and discussion here

This Post Has 3 Comments

  1. Greek Left Platform Creates New Popular Unity Party
    “The new Popular Unity Party will hold up the “NO” Referendum, honor the Anti-Austerity wishes of the people, stop privatization, break up the banking system, build a new economy and exit the Eurozone.”

    Tough to predict, especially about the future, but my crystal ball shows an insightful billyblog on this in the near future.

  2. 3 out of 3 for the first time today! I am a little confused however as to why national income is expressed as C + I + G + (E – X). It seems to me that income would be C + I + G + E, with “out-go” as C + S + T + X. No difference of course when you net the two sides of the equation to derive your sectoral balances. But if I work on a government contract deriving income from G and I buy imported electronic equipment, spending my income as X, it seems odd that my purchase of imported goods is considered a reducing income rather than increasing spending.

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