When current economic conditions are bad, people are ____________ inclined to save, and when they predict bad future economic conditions they are ____________ inclined to save now.

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 highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP price index and the nominal value of the domestic currency in the context of the Three-Sector-Model?

a. The GDP Price Index rises, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency falls. d. There is not enough information to determine what happens to these two macroeconomic variables. e. The GDP Price Index rises, and nominal value of the domestic currency remains the same.

Other things the same, as the price level rises,

a. the interest rate rises causing aggregate demand to shift. b. the interest rate rises causing a movement along a given aggregate-demand curve. c. the interest rate falls causing aggregate demand to shift. d. the interest rate falls causing a movement along a given aggregate-demand curve.