Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns
to complete equilibrium.
a. The quantity of real loanable funds per time period remains the same and reserve-related (central bank) transactions become more positive (or less negative).
b. The quantity of real loanable funds per time period falls and reserve-related (central bank) transactions remain the same.
c. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.
d. The quantity of real loanable funds per time period rises and reserve-related (central bank) transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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Refer to the table above. Country B has absolute advantage in
A) Good X. B) Good Y. C) Neither X nor Y. D) Both X and Y.
Marginal revenue is the change in:
a. total profit brought about by selling one more unit of output. b. price brought about by selling one more unit of output. c. total revenue brought about by selling one more unit of output. d. output brought about by a $1 change in product price. e. average revenue brought about by selling one more unit of output.
What MIGHT be the purpose of government regulation of natural monopolies, or economies of scale?
A) Government regulation might be used to facilitate competition. B) Government regulation might be designed to put a firm out of business. C) Government regulation might be intended to raise prices on all consumers. D) Government regulation might be created for less oversight of a profitable business.
The aggregate demand curve shows the relationship between inflation and:
A. short-run equilibrium output. B. the real interest rate. C. the exchange rate. D. the nominal interest rate.