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 GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more positive (or less negative).
b. There is not enough information to determine what happens to these two macroeconomic variables.
c. Real GDP rises, and current international transactions remain the same.
d. Real GDP falls, and current international transactions become more negative (or less positive).
e. Real GDP and current international transactions remain the same.
.A
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Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The table below shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms CleanedPer Hour Meals CookedPer HourLou54Alex33For Alex, the opportunity cost of cleaning one room is making ________ meal(s); for Lou the opportunity cost of cleaning one room is making ________ meal(s).
A. 4; 4 B. 3; 5 C. 1; 4/5 D. 1; 5/4
The law of demand implies that, other things remaining the same,
A) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded increases. B) as the demand for cheeseburgers increases, the price of a cheeseburger falls. C) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded decreases. D) as more people demand cheeseburgers, the quantity demanded increases. E) as income increases, the quantity of cheeseburgers demanded increases.
A currency drain occurs when the
A) Fed increases the required reserve ratio. B) Fed sells U.S. government securities. C) non-bank public increases its holdings of currency outside the banking system. D) banks reduce the number of loans they create with their excess reserves. E) Fed buys U.S. government securities.
Lucas argues that when policies change, expectations will change thereby
A) changing the relationships in econometric models. B) causing the government to abandon its discretionary stance. C) forcing the Fed to keep its deliberations secret. D) making it easier to predict the effects of policy changes.