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 quantity of real loanable funds per time period 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.
.C
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The saying "There's no such thing as a free lunch," applies
A) when there is some unemployment. B) on the production possibilities frontier. C) at all points inside the PPF. D) to unattainable combinations of goods and services. E) when more of one good can be produced without decreasing production of another.
A tariff is imposed on a good. The tariff will ________ the domestic quantity supplied, ________ the domestic quantity demanded, and ________ price in the home country
A) increase; decrease; increase B) increase; remain unchanged; remain unchanged C) increase; increase; increase D) increase; decrease; decrease