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 real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables.
b. The real risk-free interest rate falls, and nominal value of the domestic currency rises.
c. The real risk-free interest rate rises, and nominal value of the domestic currency rises.
d. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same.
e. The real risk-free interest rate falls, and nominal value of the domestic currency falls.
.E
You might also like to view...
If a firm's total cost rises as output rises, then
a. marginal cost is positive b. profit cannot be maximized c. total cost is minimized d. marginal cost equals marginal revenue e. the firm should shut down in the short run
Marginal means _____.
A) Additional B) unimportant. C) level or size. D) scarcity. E) inferior.
What measures would not lower infant mortality rates in the United States?
a. Prenatal care programs in low-income neighborhoods b. Emphasis on improving infant health during the post-neonatal period c. Reduced drug use among expectant mothers d. Reducing the rate of stillbirths e. Delaying childbearing beyond the teen years
Suppose Ford can triple its production of 150s by tripling its production facility for those trucks. This indicates the presence of:
a) the law of diminishing returns. b) minimum efficient scale. c) constant returns to scale. d) diseconomies of scale. e) economies of scale.