Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions become more negative (or less positive).
b. The GDP Price Index rises, and current international transactions become more positive (or less negative).
c. Real GDP Price Index falls, and current international transactions rises.
d. There is not enough information to determine what happens to these two macroeconomic variables.
e. The GDP Price Index falls, and current international transactions remains the same.
.C
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Consider the budget line in the above figure. If the consumer's income is $240, then the price of a book is
A) $20 per book. B) $24 per book. C) $12 per book. D) More information is needed to determine the price of a book.
What is the difference between scarcity and a shortage?
What will be an ideal response?
Banks are financial intermediaries, which are institutions that operate between a saver who deposits money in a bank and a ____________ who receives a loan from that bank.
a. lender b. saver c. depositor d. borrower
Fiscal policy is the use of taxes and spending by the government to affect aggregate demand
a. True b. False Indicate whether the statement is true or false