Assume that the central bank increases the reserve requirement. 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 current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and current international transactions becomes more negative (or less positive).
b. The quantity of real loanable funds per time period rises, and current international transactions becomes more positive (or less negative).
c. The quantity of real loanable funds per time period rises, and current international transactions remain the same.
d. There is not enough information to determine what happens to these two macroeconomic variables.
e. The quantity of real loanable funds per time period and current international transactions remain the same.
.A
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Which of the following best explains why making automobiles completely safe is not efficient?
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