Saturday Quiz – September 26, 2009

Welcome to the billy blog Saturday quiz. The quiz tests whether you have been paying attention over the last seven days.

See how you go with the following five questions. Your results are only known to you and no records are retained.

Quiz #27

• 1. It is important that households keep saving now to reduce their debt exposure and provide the funds for investment to get the economy moving again.
• False
• True
• 2. If the prudential regulation authority requires all authorised deposit-taking institutions to hold a certain proportion of their assets in the form of government bonds then this amounts to a small government tax on those institutions.
• False
• True
• 3. Under current US legal arrangements, the willingness of the Chinese to purchase US government bonds has allowed the US government to run bigger deficits than they might have.
• False
• True
• 4. If German and Chinese consumers increased their spending it would stimulate the world economy and increase the living standards of countries that export goods to them.
• False
• True
• 5. Sovereign funds do not store budget surpluses as national savings. They just account for assets that the government has bought in the same way that the property records of, say, the public schools and hospitals record holdings of other public assets accumulated through government spending.
• False
• True

Sorry, quiz 27 is now closed.

scroll down to find the answers and explanation below.

Quiz #27 answers

• 1. It is important that households keep saving now to reduce their debt exposure and provide the funds for investment to get the economy moving again.

Answer: False

Explanation: You might like to review The IMF fall into a loanable funds black hole again for further information or post a comment.

• 2. If the prudential regulation authority requires all authorised deposit-taking institutions to hold a certain proportion of their assets in the form of government bonds then this amounts to a small government tax on those institutions.

Answer: True

Explanation: You might like to review Banks might be forced to buy government bonds for further information or post a comment.

• 3. Under current US legal arrangements, the willingness of the Chinese to purchase US government bonds has allowed the US government to run bigger deficits than they might have.

Answer: True

Explanation: You might like to review We still have the elephant in the room for further information or post a comment.

• 4. If German and Chinese consumers increased their spending it would stimulate the world economy and increase the living standards of countries that export goods to them.

Answer: False

Explanation: You might like to review We still have the elephant in the room for further information or post a comment.

• 5. Sovereign funds do not store budget surpluses as national savings. They just account for assets that the government has bought in the same way that the property records of, say, the public schools and hospitals record holdings of other public assets accumulated through government spending.

Answer: True

Explanation: You might like to review Operational design arising from modern monetary theory for further information or post a comment.