Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real GDP and reserves account in the context of the Three-Sector-Model?
a. Real GDP rises and reserves account becomes more positive (or less negative)
b. Real GDP rises and reserves account remains the same.
c. Real GDP and reserves account remain the same.
d. Real GDP rises and reserves account remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
Economics
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Explain why deflation could prevent people from being able to repay their debts
What will be an ideal response?
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The observed correlation between baldness and heart disease demonstrates that:
A) being bald causes a man to have heart disease. B) being bald actually makes heart disease less likely. C) bald men are generally unreliable. D) there is probably some other factor that causes both baldness and heart disease.
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