Author Question: U.S. stock markets are based on the principle of a. merit recommendations. b. dominance of the ... (Read 63 times)

mckennatimberlake · **on:** Jun 30, 2018

U.S. stock markets are based on the principle of
a. merit recommendations.
b. dominance of the SEC.
c. full disclosure subject to standard accounting procedures.
d. disclosure only of related party transaction.
e. all of the above.

Question 2

Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and nominal value of the domestic currency rises.
b. The real risk-free interest rate falls, and nominal value of the domestic currency falls.
c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same.
d. The real risk-free interest rate rises, and nominal value of the domestic currency rises.
e. There is not enough information to determine what happens to these two macroeconomic variables.