The Weekend Quiz – May 20-21, 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 #426

• 1. The Australian Treasury like many official agencies equates the Non-Accelerating Inflation Rate of Unemployment (NAIRU) with full employment and uses this to calibrate their structural deficit estimates. Accordingly, the structural deficits will typically be:
• Difficult to assess because the Treasury forward estimates are subject to forecasting inaccuracy.
• Biased downwards
• Biased upwards
• 2. Under a fiat monetary system, the absence of currency convertibility means that:
• the currency is only convertible into government bonds rather than gold
• government can motivate people to exchange labour for public spending by fining anyone who walks down the street.
• there is no reason for people to hold currency as a hedge against gold price falls.
• 3. The act of issuing debt by a sovereign government logically:
• reduces the capacity of the private sector to borrow from banks because they use their deposits to buy the bonds.
• has no immediate impact on the overall holdings of assets held by the non-government sector $-for-$
• increases the assets that are held by the non-government sector $-for-$.

Sorry, quiz 426 is now closed.

You can find the answers and discussion here