The Weekend Quiz – November 12-13, 2016

Welcome to The Weekend Quiz, which used to be known as the Saturday Quiz! The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.

Quiz #399

• 1. A sovereign national government can run a balanced fiscal position over the economic cycle (peak to peak) as long as it accepts that after all the spending adjustments are exhausted that the private domestic balance will only be in surplus if the external balance is in surplus.
• False
• True
• Maybe, if private sector indebtedness is low.
• 2. Modern Monetary Theory (MMT) concurs that excessive real wages growth can cause unemployment.
• False
• True
• 3. Imagine that macroeconomic policy is geared towards keeping real GDP growth on trend. Assume this rate of growth is 3 per cent per annum. If labour productivity is growing at 2 per cent per annum and the labour force is growing at 1.5 per cent per annum and the average working week is constant in hours, then the policy-driven trend will lead to a falling unemployment rate.
• False
• True
• Maybe, depending on what is happening with aggregate spending.

Sorry, quiz 399 is now closed.

You can find the answers and discussion here