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. Over the last several decades, central banks and treasuries have used the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU) to define full employment and calibrate their estimates of the state of the economic cycle. Accordingly, these estimates will typically be:
- biased downwards indicating they think the economy is further away from full employment than it actually is.
- biased upwards indicating they think that the economy is closer to full employment than it actually is.
- difficult to assess because their forecasts are subject to forecasting inaccuracy.
- 2. When a sovereign government issues debt it logically:
- increases the financial assets that are held by the non-government sector $-for-$.
- has no impact on the overall holdings of financial assets held by the non-government sector $-for-$.
- reduces the capacity of the private sector to borrow from banks because they use their deposits to buy the bonds.
- 3. Only one of the following statements can be true when you observe rising government bond yields for new issues:
- Government spending is becoming more expensive.
- Bond prices are falling in response to demand.
- Government spending is increasing the cost of borrowing for private investors.
Sorry, quiz 694 is now closed.
You can find the answers and discussion here