Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The quantity of real loanable funds per time period falls and real GDP falls.
b. The quantity of real loanable funds per time period rises and real GDP rises.
c. The quantity of real loanable funds per time period rises and real GDP remains the same.
d. The quantity of real loanable funds per time period and real GDP remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.D
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If currency outstanding equals $500 million, checkable deposits equal $2 billion, reserves equal $200 million, and the required reserve ratio is 0.10, the money multiplier equals
A) 1.14. B) 3.57. C) 4.35. D) 5.
Net exports is the key to the equality of aggregate expenditures and aggregate income.
Answer the following statement true (T) or false (F)
The price elasticity of supply is
A) negative. B) zero. C) positive. D) unknown, depending on other factors.
Assume that demand is elastic. Of the elasticities shown here, which is the lowest that would still be considered elastic?
A. 10.0. B. 1.01. C. 1.00. D. 0.01.