The Weekend Quiz – September 19-20, 2020

September 18, 2020
bill
Saturday quiz

Welcome to 600th edition of the 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 #600

1. Modern Monetary Theory accepts the proposition that if the central bank continually expands the monetary base then there will inevitably be an accelerating inflation.

False
True

2. If there is an external deficit of 2 per cent of GDP and the government balances its fiscal position then private capital formation:

Will outstrip private domestic saving by a margin equal to 2 per cent of GDP.
Will be less than private domestic saving by a margin equal to 2 per cent of GDP.
Cannot really tell definitively without further information.

3. While a currency-issuing government does not need to issue to debt in order to raise funds prior to spending, one effect of draining funds out of the system by borrowing from the private sector is that it reduces the risk that public spending will overheat the economy.