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The Weekend Quiz – March 10-11, 2018

Summary:
Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained. 1. A sovereign national government can run a balanced fiscal position over the business cycle (peak to peak) as long as it accepts that, after all the spending adjustments are exhausted, the private domestic balance will mirror the external balance. That means a country running an external deficit will have an increasingly indebted private domestic sector.TrueFalse2. A nation that manages its currency via a currency board (for example, Estonia and Latvia) has to have sufficient foreign reserves to match the outstanding central bank liabilities (reserves and

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Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.

1. A sovereign national government can run a balanced fiscal position over the business cycle (peak to peak) as long as it accepts that, after all the spending adjustments are exhausted, the private domestic balance will mirror the external balance. That means a country running an external deficit will have an increasingly indebted private domestic sector.



2. A nation that manages its currency via a currency board (for example, Estonia and Latvia) has to have sufficient foreign reserves to match the outstanding central bank liabilities (reserves and cash outstanding). Under this arrangement it can always guarantee 100 per cent convertibility but has to endure deflationary tendencies unless it runs external surpluses.



3. Modern Monetary Theory (MMT) allows for the possibility that trade union power can cause mass unemployment.





Bill Mitchell
Bill Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. He is also a professional musician and plays guitar with the Melbourne Reggae-Dub band – Pressure Drop. The band was popular around the live music scene in Melbourne in the late 1970s and early 1980s. The band reformed in late 2010.

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