Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and current international transactions become more negative (or less positive).
b. The GDP Price Index rises, and current international transactions becomes more negative (or less positive).
c. The GDP Price Index and current international transactions remain the same.
d. The GDP Price Index rises, and current international transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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A surplus occurs when the price is
A) less than the equilibrium price. B) equal to the equilibrium price. C) greater than the equilibrium price. D) None of the above because the existence of a surplus is independent of the price of the good.
Which of the following results in a "parallel" shift outward of your indifference curves between gasoline and movie rentals?
A) any decrease in the prices of gasoline and movie rentals B) an equal percentage decrease in the prices of gasoline and movie rentals C) an increase in your income D) none of the above
If the firm is using only one variable input, explain why the condition W = MRPL is thesame condition as P = MC
What will be an ideal response?
Autonomous consumption is defined as
A) the level of real consumption spending that is independent of real disposable income. B) the real consumption spending by the autonomous government. C) the level of real consumption spending that is equal to real disposable income. D) the consumption of foreign-made goods independent of exchange rates.