Refer to the graph shown. The economy is in a short-run equilibrium at:

A progressive tax system is one in which the tax rate actually increases as income rises

a. True b. False Indicate whether the statement is true or false

Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? a. The real risk-free interest rate falls and monetary base falls

b. The real risk-free interest rate rises and monetary base falls. c. The real risk-free interest rate and monetary base remain the same. d. The real risk-free interest rate falls and monetary base rises. e. There is not enough information to determine what happens to these two macroeconomic variables.