Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile 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 rises, and reserve-related (central bank) transactions become more positive (or less negative).
b. Real GDP rises, and reserve-related (central bank) transactions remain the same.
c. Real GDP and reserve-related (central bank) transactions remain the same.
d. There is not enough information to determine what happens to these two macroeconomic variables.
e. Real GDP falls, and reserve-related (central bank) transactions remain the same.
.B
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Other things remaining the same, the U.S. interest rate differential increases if the U.S. interest rate
A) rises and foreign interest rates remain constant. B) falls and foreign interest rates remain constant. C) falls and foreign interest rates rise. D) remains constant and foreign interest rates rise.
Georg, a German citizen, just purchased 10 shares of stock in Microsoft, a U.S. company. This purchase is an example of
A) foreign public investment. B) foreign direct investment. C) contractual globalization. D) foreign portfolio investment.
If the slope of the rays from the origin to the total variable cost curve declines along the curve, it implies:
a. the average variable cost is falling. b. the marginal cost is falling. c. the average variable cost is rising. d. the marginal cost is rising.
First movers are also product innovators
Indicate whether the statement is true or false