The Weekend Quiz – June 9-10, 2018

Welcome to The Weekend 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 #481

• 1. Real wages growth has been non-existent or low in many advanced nations in recent years. However, if workers succeed in gaining real wages increases then this will squeeze the share of profits in national income.
• False
• True
• 2. The government has to issue debt to match an on-going fiscal deficit if the central bank is targetting, say a 2 per cent short-term interest rate and declines to pay a return on excess bank reserves.
• False
• True
• 3. Suppose that the government announced it intended to cut its deficit from 4 per cent of GDP to 2 per cent in the coming year and during that year net exports plus net income flows were projected to move from a deficit of 1 per cent of GDP to a surplus of 1 per cent of GDP. If private sector deleveraging resulted in it spending less than it earned to the measure of 5 per cent of GDP, then the fiscal austerity plans will undermine growth even if the net export surplus was realised.
• False
• True

Sorry, quiz 481 is now closed.

You can find the answers and discussion here