Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern…
The Weekend Quiz – July 27-28, 2019
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 #540
- 1. The immediate impact on the net worth of the non-government sector does not vary if the government issued bonds to exactly match ($-for-$) the increase in its net public spending or chooses not to so match.
- False
- True
- 2. The wider the spread between the price the central bank sets on the reserves it provides the commercial banks on demand (so-called penalty rates) and the target policy rate the more difficult it becomes for the central bank to ensure the quantity of reserves is appropriate for maintaining its target policy rate.
- False
- True
- 3. Assume that a national is continuously running an external deficit of 2 per cent of GDP. In this economy, if the private domestic sector successfully saves overall, we would always find:
- A fiscal deficit
- A fiscal surplus
- Cannot tell because we don't know the scale of the private domestic sector saving as a % of GDP.
Sorry, quiz 540 is now closed.
You can find the answers and discussion here
3 out of 3 today and was very certain about the answers. That has not been the case always.
Guess when your background is from the financial world and you do understand markets and accounting things like todays questions comes rather easy.
I have just discovered your blog as based in UK I have been a regular subscriber to “Mainly Macro” – {Bill edited out a link here] – noted that reference had be made in Simon Wren-Lewis 14June 2019 article headed …..your fantasy about Labours fiscal rule and of course I have to say his earlier rebuttal seemed to do its work on my limited understanding.
I support UK Labour of course and respect very much the writings of Mr Wren-Lewis. I believe that at these difficult times there is much nonsense published in our UK MSM about Labour and now we see our clown of a new PM with his extreme right wing bunch of liars and rogues about to embark on a spending spree pre some think election in next couple of months.
I believe that we will wont start any election until we are unfortunately out of EU and before we really start to suffer.
Just this morning one of Boris new cabinet members was claiming that external investors were queuing up to pour money into UK once we were out of EU. What a load of nonsense. The trouble is we in the UK fear that the sh 1 T will now well and truly hit the fan and we will enter a long period of stagnation and hopefully this will lead to the Tory stranglehold being finally broken. Unless there are too many Tory resignations to enable PM to stay on until he has delivered his hard Brexit for the UK .
Anyway enough waffle but relying on Mainly Macro maybe why I only scored 66.7% in your weekly quiz.
Hmm..
Would love to see the solution to Q2.
I must have mistaken the terms.
2 outa 3, Q3 wrong. Back to my average score!
Dear Nigel Warfield (at 2019/07/26 at 9:43 pm)
The New Keynesian economics that SWL perpetuates is a central part of the problem. Relying on him and his peers for insights into how things work will lead you astray I am sorry to say.
The Fiscal Rule that Labour has is neoliberal central and will fail in a major recession and bring grief to Labour. They are in denial about it.
best wishes
bill
Nigel,
Bill doesn’t feel like repeating what he has been saying for far longer than I’ve been reading him, and I’m starting to understand why.
You can’t dismantle the nonsense in a short reply, and you can’t write an elaborate response every time to people who don’t want to hear it. But you can Google subjects and keep clicking the references until the point gets driven home.
And the point is, with regards to Brexit, there’s no reason to fear a hard exit. Adequatly prepared, which is a challenge for Torys, admittedly, it’s a short term impact with much less consequences than Osbornomics (which the Boe agrees with) . Trade will keep going, with different rules, and EU countries will keep wanting pounds, especially since they’re all export driven. You’d be free to interfere with the domestic market as much as you felt like as long as people want your shiny money for what you need to import, or from taking advantage of your educated workforce. And you could tell the EU the backstop is Ireland’s problem, you’d have no obligation to do anything about the border.
Of course, Johnson would still be a neoliberal twat, but Labour wouldn’t have to be anymore.
2/3 for me
Question one tripled me up!