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

Author Question: If banks pay back their borrowings from the central bank: a. The monetary base will decrease. b. ... (Read 86 times)

tichca

  • Hero Member
  • *****
  • Posts: 554
If banks pay back their borrowings from the central bank:
 a. The monetary base will decrease.
  b. Excess reserves will rise.
  c. The M2 multiplier will fall.
  d. The monetary base will rise.

Question 2

Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
 a. The real risk-free interest rate rises, and nominal value of the domestic currency falls.
  b. The real risk-free interest rate falls, and nominal value of the domestic currency falls.
  c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same.
  d. The real risk-free interest rate rises, and nominal value of the domestic currency rises.
  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

Madisongo23

  • Sr. Member
  • ****
  • Posts: 325
Answer to Question 1

.A

Answer to Question 2

.A




tichca

  • Member
  • Posts: 554
Reply 2 on: Jun 30, 2018
:D TYSM


helenmarkerine

  • Member
  • Posts: 324
Reply 3 on: Yesterday
Gracias!

 

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

Russia has the highest death rate from cardiovascular disease followed by the Ukraine, Romania, Hungary, and Poland.

Did you know?

Egg cells are about the size of a grain of sand. They are formed inside of a female's ovaries before she is even born.

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

For a complete list of videos, visit our video library