Which of the following conclusions is not supported by the Three-Sector-Model?
a. A decrease in borrowing causes the real risk-free interest rate to fall and equilibrium quantity of real loanable funds to fall.
b. An increase in the supply of a nation's real loanable funds reduces the real risk-free interest rate and increases the equilibrium quantity of real loanable funds.
c. An increase in a nation's demand for goods and services within the intermediate range results in an increase in the real GDP and a higher GDP Price Index.
d. An increase in the value of a nation's currency encourages domestic exports and discourages imports.
e. All of the above are supported by the Three-Sector Model.
.D
You might also like to view...
Assuming that the value effect dominates, the current account will increase if
A) the real exchange rate decreases. B) the real exchange rate increases. C) disposable income increases. D) exports fall. E) domestic prices fall.
A steel company sells some steel to a bicycle company for $150 . The bicycle company uses the steel to produce a bicycle, which it sells for $250 . Taken together, these two transactions contribute
a. $150 to GDP. b. $250 to GDP. c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. d. $400 to GDP.