Saturday Quiz – December 12, 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 #38

• 1. Assume a national government on June 30 in some financial year has an excess of revenue over spending of $100 billion. At the end of the day it decides to "store" that excess by purchasing $100 billion of financial assets (for example, shares in a telecommunications company). In terms of stock-flow consistency, the government has created a surplus of $100 billion and built an equivalent valued sovereign fund.
• False
• True
• 2. Modern monetary theory which is recognises the sovereignty of the national government in its own currency, considers that the government risks losing this sovereignty if it borrows from foreign governments.
• False
• True
• 3. If the European monetary system revised the Maastricht Treaty and eliminated the Stability and Growth pact conditions on the size of fiscal deficits and public debt relative to GDP then the Euro nations would once again be equivalent to (for example) the USA or Japan.
• False
• True
• 4. In the November Labour Force Survey results for Australia we read that full-time employment growth accounted for nearly 100 per cent of the net jobs growth and monthly hours of work jumped upwards. This means that underemployment is falling.
• False
• True
• 5. Article 101 of the Maastricht Treaty forbids the monetary financing for public deficits using overdraft facilities or any other type of credit facility with the European Central Bank (or with the central banks of the Member States). However, commercial banks in member states can purchase government bonds in their countries with European Central Bank cash under certain conditions.
• False
• True

Sorry, quiz 38 is now closed.

scroll down to find the answers and explanation below.

Quiz #38 answers

• 1. Assume a national government on June 30 in some financial year has an excess of revenue over spending of $100 billion. At the end of the day it decides to "store" that excess by purchasing $100 billion of financial assets (for example, shares in a telecommunications company). In terms of stock-flow consistency, the government has created a surplus of $100 billion and built an equivalent valued sovereign fund.

Answer: False

Explanation: Please see The comedy begins for more information or post a comment.

• 2. Modern monetary theory which is recognises the sovereignty of the national government in its own currency, considers that the government risks losing this sovereignty if it borrows from foreign governments.

Answer: False

Explanation: Please see The comedy begins for more information or post a comment.

• 3. If the European monetary system revised the Maastricht Treaty and eliminated the Stability and Growth pact conditions on the size of fiscal deficits and public debt relative to GDP then the Euro nations would once again be equivalent to (for example) the USA or Japan.

Answer: False

Explanation: Please see A Greek tragedy for more information or post a comment.

• 4. In the November Labour Force Survey results for Australia we read that full-time employment growth accounted for nearly 100 per cent of the net jobs growth and monthly hours of work jumped upwards. This means that underemployment is falling.

Answer: False

Explanation: Please see Maybe the unemployment rate has peaked for more information or post a comment.

• 5. Article 101 of the Maastricht Treaty forbids the monetary financing for public deficits using overdraft facilities or any other type of credit facility with the European Central Bank (or with the central banks of the Member States). However, commercial banks in member states can purchase government bonds in their countries with European Central Bank cash under certain conditions.

Answer: True

Explanation: Please see A Greek tragedy for more information or post a comment.