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 highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and GDP Price Index falls.
b. The quantity of real loanable funds per time period falls, and GDP Price Index remains the same.
c. There is not enough information to determine what happens to these two macroeconomic variables.
d. The quantity of real loanable funds per time period falls, and GDP Price Index rises.
e. The quantity of real loanable funds per time period falls, and GDP Price Index falls.
.E
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In the long run, perfectly competitive firms produce at the output level that has the minimum
A) marginal cost. B) average total cost. C) average variable cost. D) average fixed cost. E) total revenue.
The growth rate of real GDP per person equals the
A) population growth rate plus the growth rate of real GDP. B) change in the economic growth rate divided by the change in the population growth rate. C) the economic growth rate per person divided by the change in the population growth rate. D) growth rate of real GDP minus the growth rate of the population. E) population growth rate plus the growth rate of real GDP then divided by the initial level of real GDP.