The Weekend Quiz – October 6-7, 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 #498

  • 1. The ECB has announced that it will taper its quantitative easing over the next few months. The steady decline in purchases of government bonds from the non-government sector will reduce the growth of net financial assets in that sector.
    • False
    • True
  • 2. The immediate change in the net worth of the non-government sector when the government increases its net spending is invariant to government issuing debt which exactly matches ($-for-$) the increase in net public spending.
    • False
    • True
  • 3. A rising government deficit will always allow the private domestic sector to increase its overall saving in nominal terms.
    • False
    • True

Sorry, quiz 498 is now closed.

You can find the answers and discussion here

This Post Has 3 Comments

  1. Three out of three! This weeks quiz wasn’t as hard as last week. Had to look up “invariant” again though.

  2. OMG 3/3 this week!

    My slight query for number 1 is when QE tapers off, yields in theory go up and bond prices fall – does that reduce the value of the assets held and hence the growth in the value of the net financial assets – so a bond worth x during QE is now worth less than x?

    I understand that just because the ECB isn’t buying them anymore that doesn’t mean governments won’t be issuing them when they deficit spend.

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