In a small open economy,
Sd = $5 billion + ($100 billion) rw,
Id = $10 billion - ($50 billion) rw,
Y = $50 billion,
G = $3 billion,
rw = .06.
(a) Calculate the current account balance.
(b) Calculate net exports.
(c) Calculate desired consumption.
(d) Calculate absorption.
(a) $4 billion
(b) $4 billion
(c) $36 billion
(d) $46 billion
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If banks are fully loaned up, have no excess reserves, and the required reserve ratio is raised, the amount that banks can lend is:
a. reduced and the money supply contracts. b. reduced and the money supply expands. c. reduced and there is no change in the money supply. d. increased and the money supply expands. e. increased and the money supply contracts.
If the slope of the rays from the origin to the total variable cost curve declines along the curve, it implies:
a. the average variable cost is falling. b. the marginal cost is falling. c. the average variable cost is rising. d. the marginal cost is rising.