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 the real risk-free interest rate 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. The real risk-free interest rate rises and nominal value of the domestic currency falls.
b. The real risk-free interest rate falls and nominal value of the domestic currency falls.
c. The real risk-free interest rate and nominal value of the domestic currency remain the same.
d. The real risk-free interest rate rises and nominal value of the domestic currency rises.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
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An indifference curve represents bundles of goods that a consumer
A) views as equally desirable. B) ranks from most preferred to least preferred. C) refers to any other bundle of goods. D) All of the above.
Suppose a lottery ticket costs $1and has a jackpot of $1,000 . What must the probability of winning nothing be if the bet is fair?
a. 99% b. 99.9% c. 99.999% d. 99.9999%
Refer to the table below. If the six people listed in the table are the only consumers in the market and the equilibrium price is $11, how much consumer surplus will the market generate?
| person | max price to pay | actual price(equ. price |
| bob | $13 | $11 |
| barb | 12 | 11 |
| bill | 11 | 11 |
| bart | 10 | 11 |
| brent | 9 | 11 |
| betty | 8 | 11 |
A U.S. grocery chain purchases olive oil from Tunisia and sells it to U.S. consumers. In which of the following is this transaction included?
a. U.S. consumption and U.S. imports b. U.S. consumption but not U.S. imports c. U.S. imports but not U.S. consumption d. neither U.S. consumption nor U.S. imports