Which of the following is NOT included in the flow of investment spending that is part of total planned expenditures in the economy?
A) purchases of corporate stock B) inventory investment
C) fixed investment D) spending on capital goods
A
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Briefly discuss the determinants of supply other than price
What will be an ideal response?
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP falls and the current international transactions balance becomes more negative (or less positive). b. Real GDP rises and the current international transactions balance becomes more negative (or less positive). c. Real GDP and the current international transactions balance remain the same. d. Real GDP rises and the current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.