Central banks can increase the money supply by:
a. Buying government securities.
b. Selling foreign exchange.
c. Raising margin requirements.
d. All of the above.
e. None of the above.
Question 2
Assume that the central bank purchases government securities in the open market. 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 current international transactions in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables.
b. The real risk-free interest rate falls, and current international transactions become more positive (or less positive).
c. The real risk-free interest rate rises, and current international transactions remain the same.
d. The real risk-free interest rate rises, and current international transactions become more positive (or less negative).
e. The real risk-free interest rate and current international transactions remain the same.
Central Asian Shepherd Dog
This chart illustrates the “drip down” model of government. In this, politics is formed by the soc
Blood coagulation pathways in vivo showing the central role played by thrombin
Central Tendency in Skewed Distributions
Does Intelligence Increase with Brain Size?
American Government: Roots and Reform, 2009 Edition