Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the net nonreserve international borrowing/investing balanceand monetary base in the context of the Three-Sector-Model?
a. The net nonreserve international borrowing/investing
balance becomes more positive (less negative) and monetary base rises.
b. The net nonreserve international borrowing/investing balance becomes more negative (less positive) and monetary base falls.
c. The net nonreserve international borrowing/investing balance becomes more negative (less positive) and monetary base falls.
d. The net nonreserve international borrowing/investing balance and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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A) North. B) South. C) East. D) Wilma has no dominant strategy.
In calculating price elasticity of demand, which of the following is assumed to be constant?
a. the price of the product itself b. the quantity demanded of the product c. total revenue received from the sale of the product d. the prices of all other products e. none of the above
A common tool for restricting trade through quantity is:
A. a tariff. B. immigration restrictions. C. international waters use policies. D. import quota.
Suppose that a country has an inflation rate of about 3 percent per year and a real GDP growth rate of about 3 percent per year. How large of a deficit can the government run (as a percentage of GDP) without raising the debt-to-income ratio?