The Weekend Quiz – July 23-24, 2022

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 #693

• 1. When economic growth resumes, the automatic stabilisers work to reduce government spending and increase taxes, which ensures that the government fiscal balance returns to its appropriate level.
• True
• False
• 2. Only one of the following propositions is possible (with all balances expressed as a per cent of GDP):
• A nation can run a external deficit accompanied by a government sector surplus of equal size, while the private domestic sector is spending less than they are earning.
• A nation can run a external deficit accompanied by a government sector surplus of equal size, while the private domestic sector is spending more than they are earning.
• A nation can run a external deficit accompanied by a government sector surplus that is larger, while the private domestic sector is spending less than they are earning.
• None of the above are possible as they all defy the sectoral balances accounting identity.
• 3. Broad money is a multiple of the monetary base which is what the money multiplier concept explains.
• True
• False

Sorry, quiz 693 is now closed.

You can find the answers and discussion here