The Weekend Quiz – August 11-12, 2018

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

Quiz #490

  • 1. Which scenario represents a more expansionary outcome: (a) A fiscal deficit equivalent to 5 per cent of GDP (including the impact of automatic stabilisers equivalent to 2 per cent of GDP). (b) A fiscal deficit equivalent to 4 per cent of GDP (where the automatic stabiliser component is zero). (c) A fiscal deficit of 2 per cent. (d) You cannot tell because you do not know the decomposition between the cyclical and structural components in Option (c)
    • Option (d)
    • Option (c)
    • Option (b)
    • Option (a)
  • 2. When the government matches an increase in its deficit spending with debt issued to the non-government sector, the immediate stimulus to aggregate expenditure is less than would be the case if the government didn't borrow at all.
    • False
    • True
  • 3. If the central bank required that banks have to hold reserves equivalent to their outstanding loans this would restrict lending.
    • False
    • True

Sorry, quiz 490 is now closed.

You can find the answers and discussion here

This Post Has 2 Comments

  1. Two out of three this week! Back to my normal level. Got no 1wrong. Upon reflection, I think I see why.

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