Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables.
b. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
c. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
e. Real GDP and net nonreserve-related international borrowing/lending remain the same.
.D
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A consumer maximizes satisfaction at the point where his valuation of good X, measured as the amount of good Y he would willingly give up to obtain an additional unit of X, equals:
A) the magnitude of the slope of the indifference curve through that point. B) one over the magnitude of the slope of the indifference curve through that point. C) Px/Py D) Py/Px
The goal of all regulation is the creation of perfectly competitive markets.
Answer the following statement true (T) or false (F)
Suppose a country has had a high and relatively stable inflation rate for a long time. How might this affect the costs and benefits of inflation reduction?
Unions
a. do not affect the natural rate of unemployment. b. lower the wages of unionized workers. c. raise the profits of unionized firms. d. lower the wages of workers in industries without unions.