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 real GDP and net nonreserve-related borrowing/investing in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and net nonreserve-related borrowing/investing becomes more negative (or less positive).
b. Real GDP rises and net nonreserve-related borrowing/investing becomes more negative (or less positive).
c. Real GDP falls and net nonreserve-related borrowing/investing becomes more positive (or less negative).
d. Real GDP and net nonreserve-related borrowing/investing remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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Which of the following does not describe a characteristic of short-term economic fluctuations?
A. Expansions and recessions are felt in only a few sectors of the economy. B. The unemployment rate rises during recessions. C. Durable-goods industries are more sensitive to short-term fluctuations than service and non-durable industries. D. Expansions and recessions are irregular in length and severity.
Which of the following scenarios could be an example of increasing marginal utility?
A. A father buying three game CDs for his son. B. A shopkeeper selling the tenth pound of hamburger. C. A stamp collector purchasing an additional stamp for collection. D. A consumer buying an additional unit of apple.
The principal of a loan is the:
A. original amount of the loan. B. set of rules and conditions borrowers agree to when taking out a loan. C. set of rules and conditions savers agree to when agreeing to let someone borrow their money. D. original amount that people want to borrow.
Which of the following would cause an increase in the demand curve for oranges?
a. a freeze in Florida (a major orange producing state) b. a new machine that allows orange growers to harvest oranges faster c. a decrease in the price of apples d. an announcement by the FDA that oranges lowers cholesterol