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
Open, or compound The fracture projects through the skin and there is a possibility of infection or
Central and peripheral routes to persuasion
Henry Fox Talbot, The Open Door.
Example of Reconciling a Bank Statement Cont.
The Central Nervous System
As shown in the figure, a large open tank contains a layer of oil ( density 450 kg/m3) floating ...