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Author Question: In the real loanable funds market, the vertical and horizontal axes, respectively, are: a. Nominal ... (Read 123 times)

Chloeellawright

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on: Jun 30, 2018
In the real loanable funds market, the vertical and horizontal axes, respectively, are:
 a. Nominal interest rate and nominal loanable funds.
  b. Real interest rate and real loanable funds.
  c. Real, risk-free interest rate and real loanable funds per time period.
  d. Real, risk-free interest rate and real loanable funds.
  e. None of the above.

Question 2

Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. 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 monetary base in the context of the Three-Sector-Model?
 a. The real risk-free interest rate falls and monetary base falls.
 b. The real risk-free interest rate rises and monetary base falls.
 c. The real risk-free interest rate and monetary base remain the same.
 d. The real risk-free interest rate falls and monetary base rises.
 e. There is not enough information to determine what happens to these two macroeconomic variables.


Chelseyj.hasty

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Reply #1 on: Jun 30, 2018
Answer to Question 1

.C

Answer to Question 2

.D


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