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

Author Question: The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like ... (Read 207 times)

CharlieWard

  • Hero Member
  • *****
  • Posts: 578
The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like Italy, because:
 a. Nations in the European Monetary Union were required to reduce the maturity of their debt issues.
  b. Each nation now had a solid currency, and the markets knew that the central banks of these nations could create as much money as necessary to repay government debts.
  c. Markets had more confidence in the European Central Bank than they did in the Bank of Italy.
  d. All of the above.
  e. None of the above.

Question 2

Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model?
 a. The quantity of real loanable funds per time period falls and net nonreserve international borrowing/lending balance becomes more negative (or less positive).
 b. The quantity of real loanable funds per time period rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive).
 c. The quantity of real loanable funds per time period falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative).
 d. The quantity of real loanable funds per time period and net nonreserve international borrowing/lending balance 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

helenmarkerine

  • Sr. Member
  • ****
  • Posts: 324
Answer to Question 1

.C

Answer to Question 2

.A




CharlieWard

  • Member
  • Posts: 578
Reply 2 on: Jun 30, 2018
Gracias!


zacnyjessica

  • Member
  • Posts: 345
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Did you know?

In most cases, kidneys can recover from almost complete loss of function, such as in acute kidney (renal) failure.

Did you know?

It is believed that humans initially contracted crabs from gorillas about 3 million years ago from either sleeping in gorilla nests or eating the apes.

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

There are actually 60 minerals, 16 vitamins, 12 essential amino acids, and three essential fatty acids that your body needs every day.

For a complete list of videos, visit our video library