Assume that the central bank purchases government securities in the open market. 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 reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables.
b. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remains the same.
c. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions become more positive (or less negative).
d. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive).
e. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.
.B
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Everything else equal, a depreciation of the dollar will:
A) cause the GDP of the U.S. to fall. B) cause the inflation rate in the U.S. to decrease. C) cause the GDP of the U.S. to increase. D) cause the net exports of the U.S. to decrease.
Suppose the price of a can was $5.14. In this case, to maximize its profit, the firm illustrated in the figure above would
A) increase its production and would make an economic profit. B) not change its production and would make a normal profit. C) not change its production and would make an economic profit. D) increase its production and would incur an economic loss. E) not change its production and would incur an economic loss.