Author Question: One important similarity among the European economies is a. the very minor role played by the state ... (Read 38 times)

storky111 · **on:** Jun 30, 2018

One important similarity among the European economies is
a. the very minor role played by the state in almost all cases.
b. the unimportance of safety nets to provide income and employment security.
c. the almost total absence of subsidization by the state.
d. their common constitutional history
e. the high share of transfers for the welfare state.

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 GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. Real GDP falls and reserve-related (central bank) transactions remain the same.
c. Real GDP and reserve-related (central bank) transactions remain the same.
d. Real GDP rises, and reserve-related (central bank) transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.