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 net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. There is not enough information to determine what happens to these two macroeconomic variables.
d. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same.
e. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
.E
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Suppose an airline ticket from Portland to Orlando costs $760 . A bus ticket costs $360 . Traveling by plane will take 6 hours, compared with 26 hours by bus. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be
a. $18 per hour. b. $20 per hour. c. $38 per hour. d. $44 per hour.
For better or worse, people have virtually ____________ wants.
a. supply-driven b. unlimited c. limited
One measure of “ability to pay” the national debt is the debt to
A. GDP ratio. B. tax ratio. C. spending ratio. D. investment ratio.