Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and reserves account in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and reserves account becomes more negative (or less positive).
b. The real risk-free interest rate falls, and reserves account becomes more negative (or less positive).
c. The real risk-free interest rate falls, and reserves account remain the same.
d. The real risk-free interest rate rises, and reserves account remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
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On a diagram of a production possibilities frontier, economic decline (negative growth) is represented by the production possibilities frontier shifting inward
Indicate whether the statement is true or false
Residential construction (new houses and apartments) are included in which component of GDP?
a. government purchases b. retail spending c. investment spending d. net exports
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her
home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Ziva's accountant would calculate the total cost for the day of farming to equal a. $25. b. $130. c. $300. d. $380.
Progressive taxes are designed to make higher earners pay ______.
a. a lower percentage but more total taxes than others b. a higher percentage and more total taxes than others c. a higher percentage but less total taxes than others d. the same percentage but more total taxes than others