Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP rises, and nominal value of the domestic currency rises.
b. Real GDP rises, and nominal value of the domestic currency falls.
c. Real GDP rises, and nominal value of the domestic currency remains the same.
d. Real GDP falls, and nominal value of the domestic currency rises.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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In the signaling theory of education,
a. schooling itself does not lead to more productive workers. b. chance plays more of a role than in the human-capital theory. c. schooling enhances worker productivity. d. compensating differentials do not matter.
Which of the following statements about stock-issuing firms is FALSE?
A. Firms that pay dividends cannot lose money for their investors because the stockholders can at least count on the dividend payment every year. B. Firms that issue new stock a second time are making a secondary public offering. C. Firms that issue stock are participating in the equity credit channel. D. Firms that issue stock for the first time do so through an initial public offering, handled by an investment bank.
The demand curve for a monopoly is:
a. horizontal because of economics of scale. b. infinitely elastic. c. above the marginal revenue curve. d. below the marginal revenue curve.
In the above figure, what is the quantity of workers that would be hired in a perfectly competitive market?
A) Q1 B) Q2 C) Q3 D) Q4