Public enterprise is less prevalent in Europe than in the United States
a. True
b. False
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 current international transactions balanceand monetary base in the context of the Three-Sector-Model?
a. The current international transactionsbalance becomes more positive (less negative) and monetary base rises.
b. The current international transactionsbalance becomes more negative (less positive) falls and monetary base falls.
c. The current international transactionsbalance becomes more negative (less positive) and monetary base rises.
d. The current international transactionsbalance and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following statements is true of linkage?
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