The opportunity cost of holding money balances increases when:

Consumers usually pay less than the total cost of medical treatment because

A) a third party, usually an employer, often pays most of the bill. B) competition forces doctors and hospitals to charge prices that do not cover their costs. C) the federal government pays for most medical procedures. D) a third party, usually an insurance company, often pays most of the bill.

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?

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