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 low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and current international transactions become more negative (or less positive).
b. Real GDP rises, and current international transactions become more negative (or less positive).
c. Real GDP falls, and current international transactions rises.
d. Real GDP rises, and current international transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
You might also like to view...
Macroeconomics approaches the study of economics from the viewpoint of:
A. the entire economy. B. governmental units. C. the operation of specific product and resource markets. D. individual firms.
Betty and Wilma are the only two cashiers employed at a retail store. Each of them works the same 40 hours per week and each can check out 20 customers per hour by manually entering the price of each product purchased into the cash register. The store owner replaces the old cash registers with new ones that automatically scan product prices into the register. With the new register, Betty and Wilma can each check out 60 customers per hour. Their average labour productivity as a team before the new cash registers were introduced was ____ customers per hour and after the new machines were installed was increased to ____ customers per hour.
A. 20; 60 B. 40; 120 C. 40; 60 D. 800; 2400