Assume that the central bank sells government securities in the open market. 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 reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate falls and reserve-related (central bank) transactions becomes more negative (or less positive).
b. The real risk-free interest rate remains the same and reserve-related (central bank) transactions becomes more negative (or less positive).
c. The real risk-free interest rate and reserve-related (central bank) transactions remain the same.
d. The real risk-free interest rate rises and reserve-related (central bank) transactions remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.B
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Competitive price-searcher markets are common in
a. retail selling. b. farming. c. basic manufacturing. d. electric power generation.
If Fred's annual real income rises by 8 percent each year, his annual real income will double in about:
A. 5-6 years. B. 19-20 years. C. 8-9 years. D. 10-11 years.
The difference between the actual price that a producer receives and the minimum acceptable price a producer is willing to accept is:
A. The consumer surplus B. The producer surplus C. Allocative efficiency D. Productive efficiency
Critique the infant industry or the labor argument for protection
What will be an ideal response?