Central banks get the purchasing power to make discount loans by:
a. Reducing currency in circulation.
b. Buying government securities.
c. Taking loans from the government.
d. Increasing their liabilities in the form of deposits from banks.
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 quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive).
b. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions remains the same.
c. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.
d. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Gecarcinus quadratus, a land crab from Central and South America
Emphysema. (a) Illustration comparing normal lungs and emphysemic lungs. The inserts illustrate how
To maintain global power requires the continuous development of weapons. Shown here is the Osprey. ...
Exponential Function vs. Power Function
Compute the rate of discount allowed on a rontor -tiller that lists for K 341 and is sold for K ...