Assume that the central bank sells government securities in the open market. 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 current international 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 falls and the current international transactions balance becomes more negative (or less positive).
b. The real risk-free interest rate rises and the current international transactions balance becomes more negative (or less positive).
c. The real risk-free interest rate and the current international transactions balance remain the same.
d. The real risk-free interest rate rises and the current international transactions balance remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 2
Which of the following argued against the Washington Consensus?
a. Dabrowski
b. Kuznets
c. Gerschenkron
d. Stiglitz
e. All of the above
(a) Mammal species from central Saskatchewan differ greatly in their isotopic signatures. (b) There
The oral cavity. Anterior view of the open mouth.
This graphic illustrates the original systems model of politics advanced by David Easton. Politics
An open fracture.
Hydroelectric power: 2013 Global Market
Government Corruption versus GDP per Capita, 2009