Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the reserves account and monetary base in the context of the Three-Sector-Model?
a. The reserves account becomes more positive (or less negative) and monetary base
falls.
b. The reserves account becomes more negative (or less positive) and monetary base rises.
c. The reserves account and monetary base remain the same.
d. The reserves account becomes more negative (or less positive) and monetary base remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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Increases in net investment generally result in
A) higher levels of capital stock and lower levels of depreciation. B) lower levels of capital stock and higher levels of depreciation. C) lower levels of capital stock and lower levels of depreciation. D) higher levels of capital stock and higher levels of depreciation.
In a market economy, goods are allocated to
A. all potential uses. B. all citizens on an equal basis. C. citizens with political power. D. citizens with both the desire and the willingness to pay for the goods.
The term quantity supplied refers to the quantities of a good that sellers are willing and able to sell at all prices
a. True b. False Indicate whether the statement is true or false
The difference between GNP and GDP is accounted for by:
(a) Depreciation; (b) Net factor income from abroad; (c) Indirect Taxes/subsidies; (d) Transfer Payments.