Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and GDP Price Index rises.
b. The quantity of real loanable funds per time period falls, and GDP Price Index falls.
c. The quantity of real loanable funds per time period rises, and GDP Price Index falls.
d. The quantity of real loanable funds per time period falls, and GDP Price Index remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.B
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If quantity supplied is either greater or less than the equilibrium quantity, then all of the following are true except:
a. total loss of surplus will depend on the shape of the demand and supply curves. b. the resulting loss of consumer surplus will depend on the price of the good. c. total loss of surplus will depend on the price of the good. d. there will be an inefficient allocation of resources.
Kim runs a sandwich joint that has a fixed cost of $1,000 . She has employed 3 workers and pays $100 per day to each worker. She sells 420 sandwiches per day at a price of $3.40 per sandwich. The average fixed cost incurred in the production of sandwiches is equal to:
a. $2.38. b. $3.09. c. $1.48. d. $0.88.