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 low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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If an individual deposits an amount at a compound interest rate of r% per year for a time period of T years, then:
A) Future Value = (1 - r)T × (Original Principal). B) Future Value = (1 + r)/T × (Original Principal). C) Future Value = (1 - r)/T × (Original Principal). D) Future Value = (1 + r)T × (Original Principal).
What can you learn from the figure below (Figure 13-1 from the text) which depicts the U.S. GNP and its components for the year 2009?
What will be an ideal response?
Which of the following is an example of a situation where a third party benefits from a market transaction by others?
a. Inoculation against communicable diseases b. An increase in the level of air pollution in neighborhoods near a power plant c. Allowing a chemical company to use a natural lake to discharge waste d. Two firms trading pollution credits to avoid reducing their toxic emissions
If a country moves from a point below the production possibilities curve to a point on the curve, it is experiencing
A. Increased capacity utilization. B. Long-run growth. C. Expanded capacity. D. Economic growth.