Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
b. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. Real GDP and net nonreserve-related international borrowing/lending remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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All of the following statements about marginal benefit are correct EXCEPT the marginal benefit of a good
A) is the benefit a person receives from consuming one more unit of the good or service. B) is measured as the maximum amount that a person is willing to pay for one more unit of the good. C) is equal to zero when resource use is efficient. D) decreases as the quantity consumed of the good increases.
Refer to Scenario 1 . Explain how this economy might be able to produce 45 fish and 45 crabs?
What will be an ideal response?
Demand for luxuries tends to be
a. elastic. b. inelastic. c. indeterminate. d. unit elastic.
Icy Treats is a large Italian ice dessert chain with franchises located throughout the United States. Icy Treats' advertising will likely focus on which of the following?
A) promoting Icy Treats locations in a specific state B) promoting a struggling Icy Treats location in Memphis, Tennessee C) promoting a successful Icy Treats location in Memphis, Tennessee D) promoting the enjoyment of eating Icy Treats' icees