The Weekend Quiz – March 11-12, 2017

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 #416

• 1. If the national accounts of a nation reveal that its external surplus is equivalent to 2 per cent of GDP and the private domestic sector is saving overall 3 per cent of GDP, then we know that national income adjustments would ensure that the fiscal balance was in:
• Deficit equal to 1 per cent of GDP.
• Surplus equal to 1 per cent of GDP.
• Deficit equal to 5 per cent of GDP.
• Surplus equal to 5 per cent of GDP.
• None of the above.
• 2. Even though a government that issues its own fiat currency is not revenue constrained, it is still correct to say that recipients of income support provided by such a national government live off the hard work of those who pay income taxes.
• False
• True
• 3. There is no difference in terms of the government's impact on aggregate demand, between the government matching its deficit spending with bond issues to the non-government sector and the situation where the government instructed the central bank to buy its bonds to match the deficit.
• False
• True

Sorry, quiz 416 is now closed.

You can find the answers and discussion here