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…
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.
- 1. A fact that is overlooked by those promoting austerity programs, is that when economic growth resumes, the automatic stabilisers work in a counter-cyclical fashion and ensure that the government fiscal balance returns to its appropriate level.
- 2. From a monetary perspective, it would be impossible for a central bank to directly purchase Treasury debt to facilitate a national government's fiscal deficit while still targeting a non-zero policy rate.
- 3. . Rising government bond yields for new issues indicate:
- that government spending is becoming more expensive.
- that economic growth is reducing private risk assessments of alternative financial investments.
- that government spending is increasing the cost of borrowing for private investors.
- that private investors consider public debt to be riskier.
- Answers (a) and (d) depending on the situation.
- Answers (b) and (d) depending on the situation.
Sorry, quiz 566 is now closed.
You can find the answers and discussion here