The Weekend Quiz – January 11-12, 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.

1. Quantitative easing and an expansion of net public spending both add net financial assets to the non-government sector but the former aims to stimulate demand by lowering interest rates while the latter policy choice more directly adds demand to the system.



2. If the household saving ratio rises and there is an external deficit then Modern Monetary Theory tells us that the government must increase net spending to fill the private spending gap or else national output and income will fall.



3. When a government such as the US or Australian government voluntarily constrains itself by issuing debt to the private sector to match its net spending position (deficit), it reduces the funds available for private spending.





This Post Has 4 Comments

  2. Your tests have become a lot easier than they used to be Bill. False statements like central bank QE adding NFA to private sector are easy to spot.

    Reply

  3. Well I have certainly learned a tremendous amount from the quizzes (and the blog in general) over time. Arguably, so much so that it is now possible to make somewhat coherent arguments about relatively minor disagreements I might have with questions and answers whereas previously that would have been impossible for me. And I love doing that even as I hope it is not too annoying, which it might well be oftentimes.

    Bill might say that no records are retained- but I keep a sort of record in my head about which questions I got right for the right reasons, which questions I was absolutely wrong about, which questions my answer was deemed wrong due to the idiosyncrasies of language, and the very, very few questions where, at least in my opinion, Bill’s answer was not correct and mine was. Not that he has ever agreed with me about that last category… One of these days it might happen maybe.

    That would be a happy day for me. But in the meantime I just adjust my scores as I deem fit and that seems to keep me relatively sane and eager to continue learning.

    Thanks for the quiz!

    Reply

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