Chapter 3 -- Quiz -- General

Thomas Piketty, Capital in the 21st Century (Harvard University Press 2014)

Patrick Toche

Question 1

Net public wealth (the difference between the value of assets and debt held by government agencies) in the United Kingdom, France, or Germany represents

  1. less than 10% of national wealth
  2. between 10% and 20% of national wealth
  3. between 20% and 30% of national wealth
  4. between 30% and 40% of national wealth
  5. between 40% and 50% of national wealth

The question asks a percentage of national wealth!

See Table 3.1

Question 2

Net public wealth (the difference between the value of assets and debt held by government agencies) in the United Kingdom, France, or Germany represents

  1. less than -1,000% of national income
  2. about -500% of national income
  3. between -100% and +100% of national income
  4. about +500% of national income
  5. more than +1,000% of national income

The question asks a percentage of national income!

See Table 3.1

Question 3

Net public wealth (the difference between the value of assets and debt held by government agencies) over the period 1700-2010...

  1. has generally been positive in France, but negative in the United Kingdom, owing to large public debts accumulated in war times.
  2. has generally been positive in United Kingdom, but negative in the France, owing to large public debts accumulated in war times.
  3. has generally been positive in France, but negative in the United Kingdom, owing to large public assets accumulated in colonial times.
  4. has generally been positive in United Kingdom, but negative in the France, owing to large public assets accumulated in colonial times.
  5. has generally been close to zero in France and the United Kingdom, owing to strict balanced budget policies in both countries.

See Figures 3.3/3.5 for the United Kingdom and 3.4/3.6 for France.

See Table 3.1. See also discussion page 126. While the United Kingdom and France both accumulated debt to finance their wars (often agains each other), differences in their history explain why debt has often been greater in the United Kingdom. France defaulted during the French revolution and, less dramatically, at other times too. In the 20th century, France experienced greater rates of inflation, especially between the wars. After the nazi occupation of France in 1940, France did not resort to debt to finance the war effort (but contributed assets, labor, etc. to Germany), while the United Kingdom was never occupied (Hitler lost the 'Battle of Britain') and borrowed heavily.