Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables.
b. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
c. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
e. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
.B
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To combat a recession with discretionary fiscal policy, Congress and the president should
A) decrease taxes to increase consumer disposable income. B) decrease government spending to balance the budget. C) lower interest rates and increase investment by increasing the money supply. D) raise taxes on interest and dividends, but not on personal income.
Angela, Bonnie, and Carl are visiting the local paint store. Angela, owner of Angela's Artful Painting Co, is posting a Help Wanted sign because she is looking for more painters to join her crew. Bonnie, who is a sole proprietor, is placing an order for 12 gallons of green paint. Carl is a painter who is looking for a job and is reading the bulletin board in the paint shop. Who is operating in
the long run? a. Angela only b. Bonnie only c. Carl only d. Carl and Angela e. no one is operating in the long run
Which of the following is NOT a contributor to an employee's attitude?
a. previous jobs b. education c. peers d. family
Figure 14.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. If the insurance companies are pessimistic and set their price according to their pessimistic expectations:
A. the companies' pessimism is not justified. B. the market will include some low-cost and some high-cost customers. C. the market will include only low-cost customers. D. the market will include only high-cost customers.