Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. The GDP Price Index and reserve-related (central bank) transactions remain the same.
c. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same.
d. The GDP Price Index rises, and reserve-related (central bank) transactions become more positive (or less negative).
e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
.E
You might also like to view...
The budget constraint represents:
a. all possible consumption combinations of goods that someone can afford when all income is spent. b. a single consumption combination of goods that someone can afford when all income is spent. c. all possible consumption combinations of goods that someone can afford when disposable income is spent. d. all possible consumption combinations of goods that society can afford when all income is spent.
A rational decision maker takes an action if and only if
a. the average benefit of the action exceeds the average cost. b. the average cost of the action exceeds the average benefit. c. the marginal benefit of the action exceeds the marginal cost. d. the marginal cost of the action exceeds the marginal benefit.
Tara sells her organic carrots in a perfectly competitive market for a price that is just higher than her minimum average variable cost of production, but lower than her minimum average total cost of production. Which of the following statements is then true?
a. Although she is currently incurring a loss, she could restore profitability by advertising her carrots. b. She can minimize her losses by shutting down her operations now. c. She is incurring a loss, because price is less than ATC. d. She is earning a profit, because price is above AVC.
In the United States economy, what is the basic measure of money?
A. wealth B. M1 C. disposable income D. commodities