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The Weekend Quiz – November 14-15, 2020

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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. Assuming the expenditure multiplier is greater than 1, if the government increases its deficit, the net spending injection will have a greatest impact on aggregate spending if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.TrueFalse2. If the government achieves its aim of reducing its fiscal deficit by say billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a billion quantitative easing

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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.

The Weekend Quiz – November 14-15, 2020

1. Assuming the expenditure multiplier is greater than 1, if the government increases its deficit, the net spending injection will have a greatest impact on aggregate spending if there are no offsetting monetary operations by the central bank (government bond sales) draining the excess reserves created.



2. If the government achieves its aim of reducing its fiscal deficit by say $10 billion, the net financial assets destroyed by this withdrawal could be replaced by the central bank engaging in a $10 billion quantitative easing program.



3. Which government deficit outcome is the most expansionary?







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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