Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and reserves account in the context of the Three-Sector-Model?
a. Real GDP rises and reserves account becomes more negative (or less positive)
b. Real GDP falls and reserves account remains the same.
c. Real GDP and reserves account remain the same.
d. Real GDP rises and reserves account remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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The Fixed Effects regression model
A) has n different intercepts. B) the slope coefficients are allowed to differ across entities, but the intercept is "fixed" (remains unchanged). C) has "fixed" (repaired) the effect of heteroskedasticity. D) in a log-log model may include logs of the binary variables, which control for the fixed effects.
Markets can efficiently handle irreversible decisions without involvement of government
a. True b. False Indicate whether the statement is true or false
Which of the following best explains how an economy could simultaneously experience high inflation and high unemployment?
A) The government increases spending without increasing taxes B) The government increase taxes without increasing spending C) Inflationary expectations decline D) Women and teenagers stay out of the labor force E) Negative supply shocks cause factor prices to increase
If the Fed increases the money supply, then _____
Fill in the blank(s) with the appropriate word(s).