Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP rises and nominal value of the domestic currency falls.
b. Real GDP falls and nominal value of the domestic currency remains the same.
c. Real GDP and nominal value of the domestic currency remain the same.
d. Real GDP rises and nominal value of the domestic currency remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
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Many people have heard that the stock market rises when a team from the National Football Conference (NFC) wins the Super Bowl, and falls when a team from the American Football Conference (AFC) is victorious. If you conclude that there is a causal relationship between the outcome of the Super Bowl and stock prices, you probably are: a. confusing correlation with causation
b. committing the fallacy of composition. c. confusing the direction of causality, since everyone knows that stock prices determine which team wins the Super Bowl. d. none of the above
Consider a Cournot oligopoly consisting of five identical firms producing good X. If the firms produce good X at a marginal cost of $7 per unit and the market elasticity of demand is ?3, determine the profit-maximizing price.
A. $7 per unit B. $5.25 per unit C. $4.20 per unit D. $7.50 per unit
Which of the following tactics is most associated with the demand-enhancement union model?
A. Reducing the price of inputs that are substitutes for union workers. B. Lobbying for increases in public expenditures on the product it is producing. C. Restricting the number of workers allowed to work in the industry. D. Increasing the price of products that are complements for the one it is producing.
When firms compete with each other rather than cooperate:
A. consumers will end up better off. B. the firms will end up better off. C. prices will be higher. D. output will be lower.