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 net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
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In the above figure, which of the following is TRUE regarding the movements from point A to B and from point C to D?
I) The movement from point A to B shows that the economy has chosen to produce 100 more jets. II) The movement from point C to D shows that the economy has chosen to produce 100 more jets. III) The movement from point A to B and from point C to D have the same opportunity cost. A) I and II B) I and III C) II and III D) I, II and III
Refer to Table 2-5. If the two countries specialize and trade, who should export lumber?
A) They should both be exporting lumber. B) Finland C) There is no basis for trade between the two countries. D) Estonia
Refer to Table 1-1. Using marginal analysis, by how many hours should Lydia extend her nail salon's hours of operations?
A) 2 hours B) 3 hours C) 4 hours D) 5 hours E) 6 hours
The best measure of living standards is
A. GDP per capita. B. Investment as a percentage of GDP. C. The ratio of current GDP to GDP in the base period. D. GDP per worker.