Among industrialized economies, taxes as a percentage of GDP are lowest in:
a. The Four Tigers
b. Germany and France
c. The United States
d. Australia and New Zealand
e. None of the above
Question 2
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions becomes more positive (or less negative).
b. The GDP Price Index rises, and current international transactions becomes more negative (or less positive).
c. The GDP Price Index and current international transactions remain the same.
d. The GDP Price Index rises, and current international transactions remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
