This topic contains a solution. Click here to go to the answer

Author Question: If a bank purchases government securities rather than lends funds, the: a. M2 money supply does not ... (Read 83 times)

Pea0909berry

  • Hero Member
  • *****
  • Posts: 573
If a bank purchases government securities rather than lends funds, the:
 a. M2 money supply does not rise.
  b. M2 money supply rises, but not by as much as when the funds are lent.
  c. M2 money supply rises by more than would be the case if the funds were lent.
  d. M2 money supply rises by the same amount as if they were lent.

Question 2

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
 a. The real risk-free interest rate rises, and GDP Price Index rises.
  b. There is not enough information to determine what happens to these two macroeconomic variables.
  c. The real risk-free interest rate and GDP Price Index remain the same.
  d. The real risk-free interest rate falls, and GDP Price Index falls.
  e. The real risk-free interest rate rises, and GDP Price Index falls.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mcni194

  • Sr. Member
  • ****
  • Posts: 311
Answer to Question 1

.D

Answer to Question 2

.A




Pea0909berry

  • Member
  • Posts: 573
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)


dawsa925

  • Member
  • Posts: 326
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Fewer than 10% of babies are born on their exact due dates, 50% are born within 1 week of the due date, and 90% are born within 2 weeks of the date.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

For a complete list of videos, visit our video library