The Weekend Quiz – October 24-25, 2020

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 #606

• 1. Only one of the following propositions is possible for a nation over any given period (with all balances expressed as a per cent of GDP):
• An external deficit accompanied by a public surplus of equal size and the private domestic sector saving overall.
• An external deficit accompanied by a public surplus of equal size and the private domestic sector dis-saving overall.
• An external deficit accompanied by a larger public surplus and the private domestic sector saving overall.
• 2. If in attempting to estimate the cyclical component of a government fiscal outcome we underestimate the potential capacity of an economy, we will conclude that the government's discretionary fiscal position is less expansionary than it actually is.
• False
• True
• 3. Governments concerned with their public debt ratio should encourage growth because the debt ratio falls once economic growth resumes.
• False
• True

Sorry, quiz 606 is now closed.

You can find the answers and discussion here