Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the current international transactions balance and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The current international transactions balance rises and monetary base rises.
b. The current international transactions balance rises and monetary base falls.
c. The current international transactions balance and monetary base fall.
d. The current international transactions balance and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.D
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Identify at least two factors other than distance and the age of prospective migrants that may affect the cost and benefit calculations of emigrants to the United States
What will be an ideal response?
The Federal Reserve influences the level of interest rates in the short run by changing the
A) demand for money through changes in reserve requirements. B) supply of money through open market operations. C) supply of money through changes in stock market operations. D) demand for money through open market operations.
Active policy making refers to
A) actions taken by policy makers in response to or in anticipation of some change in the overall economy. B) policy making that is carried out in response to a rule. C) relying on policies that act as automatic stabilizers. D) nondiscretionary policy making.
Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage
a. increases, and the equilibrium quantity of labor increases. b. increases, and the equilibrium quantity of labor decreases. c. decreases, and the equilibrium quantity of labor increases. d. decreases, and the equilibrium quantity of labor decreases.