Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. 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 real GDP in the context of the Three-Sector-Model?
a. The nominal exchange rate remains the same and monetary base rises
b. The nominal exchange rate remains the same and monetary base falls.
c. The nominal exchange rate and monetary base fall.
d. The nominal exchange rate and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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In general, price controls have a:
A. larger effect in the long run because demand and supply become more elastic over time. B. larger effect in the short run since demand and supply become more elastic over time. C. smaller effect in the long run since demand and supply become less elastic over time. D. smaller effect in the short run because demand and supply become less elastic over time.
All taxes distort market decisions, affecting the buying and selling of goods and services
a. True b. False Indicate whether the statement is true or false
The output expansion effect of the sale of a firm's last ?Q units of output is:
A. the additional revenue from selling ?Q units at price P(Q). B. the reduced revenue from selling (Q - ?Q) units at a lower price of P(Q). C. the additional revenue from selling ?Q units at price P(Q + ?Q). D. the reduced revenue from selling (Q - ?Q) units at a lower price of P(Q - ?Q).
Units of CapitalNumber of WorkersOutput/Day50051405290531505420055235
Refer to Table 2.3. What can be observed about the given resources?
A. Capital and labor are both fixed. B. Capital is variable. C. Capital is fixed. D. Labor is fixed.