The Weekend Quiz – January 5-6

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 #511

• 1. If inflation rate remained equal to the nominal interest rate, then the government primary deficit could double (from say 2 to 4 per cent of GDP) without pushing up public debt as a proportion of GDP.
• False
• True
• 2. If the share of wages in national income falls then the workers' material standard of living also falls.
• False
• True
• 3. Assume that inflation is stable, there is excess productive capacity, and the central bank maintains its current interest rate target. If on average the government collects an income tax of 20 cents in the dollar, then total tax revenue will rise by 0.20 times $x if government spending increases (once and for all) by $x dollars and private investment and exports remain unchanged.
• False
• True

Sorry, quiz 511 is now closed.

You can find the answers and discussion here