Wednesday , October 20 2021
Home / Bill Mitchell / The Weekend Quiz – September 18-19, 2021

The Weekend Quiz – September 18-19, 2021

Summary:
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. Using national accounting rules which dictate that the government balance is always equal to the non-government balance with an opposite sign, we can conclude that if the public sector successfully achieves a fiscal surplus then the private sector must be spending more than it is earning (that is, running a deficit).TrueFalse2. Modern Monetary Theory (MMT) denies that the stock of aggregate spending can exceed the capacity of the productive sector and cause inflation.TrueFalse3. Assume that the government increases spending by 0 billion at the

Topics:
Bill Mitchell considers the following as important:

This could be interesting, too:

Bill Mitchell writes The Weekend Quiz – October 16-17, 2021

Bill Mitchell writes The Weekend Quiz – October 9-10, 2021 – answers and discussion

Bill Mitchell writes The Weekend Quiz – October 9-10, 2021

Bill Mitchell writes The Weekend Quiz – October 2-3, 2021 – answers and discussion

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 – September 18-19, 2021

1. Using national accounting rules which dictate that the government balance is always equal to the non-government balance with an opposite sign, we can conclude that if the public sector successfully achieves a fiscal surplus then the private sector must be spending more than it is earning (that is, running a deficit).



2. Modern Monetary Theory (MMT) denies that the stock of aggregate spending can exceed the capacity of the productive sector and cause inflation.



3. Assume that the government increases spending by $200 billion at the start of each year and maintains this policy for the next three years from now. Economists estimate the spending multiplier to be 2 and the impact is exhausted within each year (all induced consumption is completed within 12 months). The tax multiplier is estimated to be equal to 1 and the current average tax rate is equal to 25 per cent (so tax revenue rises by 25 cents for every extra dollar of GDP produced ). What is the cumulative impact of this fiscal expansion on GDP after three years?







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.

Leave a Reply

Your email address will not be published. Required fields are marked *