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 GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. The GDP Price Index and reserve-related (central bank) transactions remain the same.
c. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same.
d. The GDP Price Index rises, and reserve-related (central bank) transactions become more positive (or less negative).
e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
.E
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Economic restructuring that takes place as a result of opening to trade with other countries
A) contradicts the idea of gains from trade. B) causes some trading activity to be zero sum. C) worsens the nation's allocation of resources. D) improves the nation's allocation of resources. E) is a highly unlikely event.
Gold is
a. not a resource in the economy b. an example of a renewable resource for the economy c. an example of a nonrenewable resource for the economy d. part of the capital resources of the economy e. part of the entrepreneurial resources of the economy