Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. Real GDP falls and reserve-related (central bank) transactions remain the same.
c. Real GDP and reserve-related (central bank) transactions remain the same.
d. Real GDP rises, and reserve-related (central bank) transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.D
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Fran runs a doughnut shop in a tiny 3-person town. The table below shows the quantity demand by the three townspeople at various prices.Price PerDoughnutQuantity Demandedby AlQuantity Demandedby BettyQuantity Demandedby Carol10 cents104625 cents92535 cents71550 cents504 When the price of a doughnut is 50 cents, what is the market demand for doughnuts?
A. 5 doughnuts B. 31 doughnuts C. 9 doughnuts D. 20 doughnuts
If the U.S. government increases spending, the U.S. Treasury
a. has the legal right to issue currency to pay for the spending. b. does not have the legal right to issue currency to pay for the spending. c. usually pays for the spending by selling bonds directly to the Fed. d. seldom pays for the spending by selling bonds to the public.
The WTO functions as:
A. The enforcer of trade rules for the world. B. An international informant on terrorism. C. An international weapons inspector. D. The international authority on currency exchange.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is
A. -2/3. B. -1.5. C. -3. D. -30.