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The Weekend Quiz – July 24-25, 2021

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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. If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then:Both the private domestic sector and the government sector overall can pay down their respective debt liabilities.Either the private domestic sector or the government sector overall can pay down their debt liabilities.Neither the private domestic sector or the government sector overall can pay down their debt liabilities.2. The debt of a government which issues its own currency and floats it in international markets is not really a

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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 – July 24-25, 2021

1. If the external sector is in deficit overall and GDP growth rate is faster than the real interest rate, then:




2. The debt of a government which issues its own currency and floats it in international markets is not really a liability because the government can just continuously roll it over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt but also has to repay them at the due date.



3. The fact that large scale quantitative easing programs conducted by central banks has not caused inflation, provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.





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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