Holding constant risk and the real returns available abroad, lower domestic real interest rates ________ capital inflows, ________ capital outflows, and ________ net capital inflows.
A. increase; decrease; increase
B. decrease; increase; decrease
C. increase; increase; decrease
D. increase; increase; increase
Answer: B
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Use the following table showing the consumption schedule for a hypothetical economy to answer the next question.All figures are in billions of dollars.RGDPConsumption$600$590610598620606630614640622650630660638If gross investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $4, other things constant, then the equilibrium real GDP would become
A. $630. B. $660. C. $640. D. $650.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index and reserve-related (central bank) transactions remain the same. c. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions become more positive (or less negative). e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
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What will be an ideal response?
PriceQuantity DemandedQuantity Supplied$02000$115040$210080$350120$40160 Refer to the table. If the current price in this market is $3 then there is
A. excess demand and pressure on the price to fall. B. excess supply and pressure on the price to fall. C. excess demand and pressure on the price to rise. D. excess supply and pressure on the price to rise.