The sale of U.S. currency and purchase of foreign currency by the Federal Reserve would shift the demand curve for U.S. dollars to the left

Assume that the central bank purchases government securities in the open market. 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 the nominal value of the domestic currency in the context of the Three-Sector-Model?

a. The real risk-free interest rate falls, and nominal value of the domestic currency rises. b. The real risk-free interest rate falls, and nominal value of the domestic currency falls. c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. d. The real risk-free interest rate rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.

Price elasticity of supply is always

A) positive because of the law of supply. B) negative because of the law of supply. C) positive because of diminishing marginal utility. D) negative because percentages can only be negative.