Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and current international transactions becomes more negative (or less positive).
b. The quantity of real loanable funds per time period rises, and current international transactions becomes more positive (or less negative).
c. The quantity of real loanable funds per time period rises, and current international transactions remain the same.
d. There is not enough information to determine what happens to these two macroeconomic variables.
e. The quantity of real loanable funds per time period and current international transactions remain the same.
.A
You might also like to view...
Which one of the following is a function of the Federal Reserve System?
A) providing the economy with currency B) serving as a lender of last resort C) providing a system for check clearing D) all of the above
In what ways is the Fed independent of the political process?
What will be an ideal response?
Whether a cross-price elasticity of demand is positive or negative indicates whether the:
A. goods are substitutes or complements. B. elasticity is reported in absolute value. C. good's demand is elastic or inelastic. D. good is a luxury or a necessity.
The civilian labor force consists of:
A. all civilians over the age of 16. B. the employed plus the unemployed who are not in the military. C. only individuals who are actually at work during a given week. D. civilians who are not in prisons or mental hospitals.