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 reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions remain the same.
b. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions become more positive (or less negative).
c. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive).
d. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.D
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During the year a country's income was $6.0 trillion and its consumption was $5.5 trillion. At the start of the year its wealth was $30.0 trillion. The country's wealth at the end of the year was
A) $36.0 trillion. B) $35.5 trillion. C) $30.0 trillion. D) $6.0 trillion. E) $30.5 trillion.
During World War II, the increasing productivity of workers who built ships was due primarily to
A) human capital accumulation through schooling and training. B) human capital accumulation by repeatedly doing the same tasks. C) discoveries of new and better technologies. D) investments by shipyards in new capital equipment.
If the demand for computer software rises as incomes rise, then computer software is a (an)
A) inferior good B) substitute (good) for computers C) normal good D) complement (good) for computers E) c and d
In microeconomic term, the ability of a good or a service to satisfy wants is called:
A. opportunity cost. B. utility. C. profit potential. D. utility maximization.