Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility 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. The GDP Price Index rises, and nominal value of the domestic currency falls.
b. The GDP Price Index falls, and nominal value of the domestic currency rises.
c. The GDP Price Index rises, and nominal value of the domestic currency remains the same.
d. The GDP Price Index rises, 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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Shortage means the same thing as scarcity
Indicate whether the statement is true or false
When prices of new houses rise significantly faster than rent prices, this is evidence of a:
A) debt-deflation process B) bubble C) financial crisis D) sovereign debt crisis
Which of the following is correct?
a. Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries. b. Productivity is not closely linked to government policies. c. The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress. d. Productivity may be measured by the growth rate of real GDP per person.
Which of the following pieces of legislation is NOT aimed at curbing the negative effects of asymmetric information?
A. Securities and Exchange Act B. Lanham Act C. Robinson-Patman Act D. Truth in Lending Simplification Act