With lags in monetary policy, an effective expansionary policy must be initiated many months ________ the start of the economic downturn it is intended to moderate, and this requires ________ economic forecasts

The incentives for oligopolists to cheat on collusive agreements are strongest during periods of increasing industry sales

a. True b. False

Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions balance in the context of the Three-Sector-Model? a. The quantity of real loanable funds

per time period falls and current international transactions balance becomes more positive (or less negative). b. The quantity of real loanable funds per time period rises and current international transactions balance becomes more negative (or less positive). c. The quantity of real loanable funds per time period and current international transactions balance remain the same. d. The quantity of real loanable funds per time period rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.