Assume that the central bank lowers the discount to increase the nation's monetary base. 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 reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium.
a. The real risk-free interest rate remains the same and reserve-related (central bank) transactions become more positive (or less negative).
b. The real risk-free interest rate falls and reserve-related (central bank) transactions become more negative (or less positive).
c. The real risk-free interest rate falls and reserve-related (central bank) transactions remain the same.
d. The real risk-free interest rate and reserve-related (central bank) transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 2
A nation can determine how close it is to the classical range by considering its:
a. Export position.
b. Net export position.
c. Exchange rate.
d. None of the above.
Pink-eared Duck - At Central Park Zoo, New York, USA
A mechanism for peptidyltransferase involving A2451 (E. coli) as a general base
Keeping your feelings to yourself may increase your stress level
Gen Bio 2 - Central Dogma
Nucleotide-Base Composition of Various Genomes
Base excision repair