Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The quantity of real loanable funds per time period rises and GDP Price Index rises.
b. The quantity of real loanable funds per time period falls and GDP Price Index falls.
c. The quantity of real loanable funds per time period rises and GDP Price Index falls.
d. The quantity of real loanable funds per time period and GDP Price Index remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.D
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A person's real income will increase by 3% if her nominal income increases by
A. 5% while the price index falls by 2%. B. 5% while the price index rises by 2%. C. 2% while the price index falls by 5%. D. 2% while the price index rises by 5%.
According to Figure 6.1, in postwar U.S history ________
A) productivity growth was always exceeded by labor growth B) labor growth has always exceeded capital growth C) productivity growth has always exceeded capital growth D) output growth has always exceeded productivity growth
Most Americans
a. have accurate perceptions of the level of corporate profits. b. underestimate corporate profits. c. overestimate corporate profits. d. believe that corporations earn zero profit.
A firm will earn economic profits whenever:
A. average revenue exceeds average total costs. B. average revenue exceeds average variable costs. C. marginal revenue exceeds variable costs. D. marginal revenue exceeds marginal costs.