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 quantity of real loanable funds per time period and current international transactions balance in the context of the Three-Sector-Model?
a. The quantity of real loanable
funds per time period falls and current international transactions balance becomes more negative (or less positive).
b. The quantity of real loanable funds per time period rises and current international transactions balance becomes more negative (or less positive).
c. The quantity of real loanable funds per time period and current international transactions balance remain the same.
d. The quantity of real loanable funds per time period rises and current international transactions balance remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.B
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Dan has a car valued at $10,000 that gives him a utility of 50 units. There is a 10 percent chance that he will have an accident that will make his car worthless, in which case his utility will be zero
His utility from a wealth of $7,000 is 45 units. The maximum amount Dan will be willing to pay for car insurance is A) $1,000. B) $3,000. C) $7,000. D) zero.
Real GDP is:
a. the base year market value of all final goods and services produced domestically during a given period. b. the current year market value of all final goods and services produced domestically during a given period. c. usually greater than nominal GDP d. the current year market value of domestic production of intermediate goods.
Greater and more extensive government regulations of safety standards and environmental controls will have what effect on short-run and long-run aggregate supply?
Speculative demand of money depends on:
a. Income b. Expenditure C. Interest rate d. None of the above.