Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. Real GDP falls and reserve-related (central bank) transactions remain the same.
c. Real GDP and reserve-related (central bank) transactions remain the same.
d. Real GDP 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.
.D
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Between 1960 and 2011,
A) the male labor force participation rate decreased rapidly, the female labor force participation rate decreased slowly, and the two rates are now equal. B) the male labor force participation rate decreased and the female labor force participation rate increased. C) both the male and female labor force participation rates increased. D) both the male and female labor force participation rates decreased slowly. E) the male labor force participation rate did not change and the female labor force participation rate increased.
Which of the following would shift a nation's production possibilities frontier outward?
A) an increase in demand for the nation's products B) discovering a cheaper way to convert sunshine into electricity C) a decrease in the unemployment rate D) a law requiring workers to retire at age 50
According to Nakamura and Steinsson's research, prices are ________ sticky than Bils and Klenow found because the latter failed to account for ________
A) more; sales B) more; taxes C) less; taxes D) less; sales
When demand for a product is very inelastic, the burden of a tax falls mainly on
a. producers. b. consumers. c. tax collectors. d. people who drop out of the market.