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 reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. The GDP Price Index falls, and reserve-related (central bank)transactions remain the same.
c. The GDP Price Index and reserve-related (central bank) transactions remain the same.
d. The GDP Price Index 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.
.B
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When inflation occurs
A. each dollar of income will buy more output than before. B. the purchasing power of money decreases. C. the purchasing power of money increases. D. all prices are rising.
Currently, the FDIC insures deposits up to a limit of
A) $1000. B) $100,000. C) $250,000. D) $1,000,000.
If a regulatory board wanted to make sure that a natural monopoly chose a price resulting in the efficient level of output, it should set a price equal to: a. marginal cost
b. average fixed cost. c. average variable cost. d. average total cost.
As price rises, the quantity ______________ rises.
A. demanded B. supplied C. demanded and supplied