This topic contains a solution. Click here to go to the answer

Author Question: If the money supply rises by 8 and the average price level rises by 8, then the supply and demand ... (Read 133 times)

james

  • Hero Member
  • *****
  • Posts: 573
If the money supply rises by 8 and the average price level rises by 8, then the supply and demand for real loanable funds change as follows:
 a. Actually, neither real supply nor real demand changes.
  b. Real supply rises by 8 and real demand remains the same.
  c. Real demand rises by 8 and real supply remains the same.
  d. Real demand and supply rise by 8.
  e. Real supply rises, falls, or stays the same depending on the relationship between actual and expected inflation.

Question 2

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 current international transactions balance and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium.
 a. The current international transactions balance rises and monetary base rises.
  b. The current international transactions balance rises and monetary base falls.
  c. The current international transactions balance and monetary base fall.
  d. The current international transactions balance and monetary base remain the same.
  e. There is not enough information to determine what happens to these two macroeconomic variables.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

amanda_14

  • Sr. Member
  • ****
  • Posts: 342
Answer to Question 1

.A

Answer to Question 2

.D




james

  • Member
  • Posts: 573
Reply 2 on: Jun 30, 2018
Wow, this really help


chereeb

  • Member
  • Posts: 326
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

There are more bacteria in your mouth than there are people in the world.

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

The term bacteria was devised in the 19th century by German biologist Ferdinand Cohn. He based it on the Greek word "bakterion" meaning a small rod or staff. Cohn is considered to be the father of modern bacteriology.

For a complete list of videos, visit our video library