Refer to Table 2-11. If the two countries specialize and trade, who should export digital cameras?

Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and reserve-related (central bank) transactions in the context of the Three-Sector-Model?

a. The real risk-free interest rate falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The real risk-free interest rate rises, and reserve-related (central bank) transactions become more negative (or less positive). c. The real risk-free interest rate and reserve-related (central bank) transactions remain the same. d. The real risk-free interest rate rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.

This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.According to the graph shown, if this economy were to open to trade, consumers would:

A. enjoy a net gain to surplus of DEFG. B. suffer a transfer of surplus to the producer of DEFG. C. experience deadweight loss of FG. D. suffer a net loss to surplus of DEFG.