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 the nominal value of the domestic currency in the context of the
Three-Sector-Model?
a. Real GDP falls, and nominal value of the domestic currency rises.
b. Real GDP falls, and nominal value of the domestic currency remains the same.
c. Real GDP rises, and nominal value of the domestic currency rises.
d. Real GDP falls, and nominal value of the domestic currency falls.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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Refer to Figure 5-3. The efficient price of medical services is
A) $40. B) $55. C) $65. D) > $65.
The law of diminishing marginal returns per worker states that beyond some point:
a. marginal satisfaction declines per unit. b. decreases in capital per worker add more to output per worker. c. marginal satisfaction increases per unit. d. increases in capital per worker add less to output per worker.