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 quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP rises and nominal value of the domestic currency falls.
b. Real GDP falls and nominal value of the domestic currency remains the same.
c. Real GDP rises and nominal value of the domestic currency remains the same.
d. Real GDP rises and nominal value of the domestic currency rises.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 2 - The form of contracting used throughout much of Asia:
a. relational contracting
b. civil law
c. criminalizing civil offenses
d. common law
e. all of the above
Question 3 - Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to rise and monetary base to remain the same.
b. Demand for real goods and services to remain the same and M2 money supply to remain the same.
c. Demand for real goods and services to remain the same and M2 money multiplier to fall.
d. Demand for real goods and services to remain the same and M2 money supply to rise.
Question 4 - 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 real risk-free interest rate and real GDP in the context of the Three-Sector-Model? Assume the nominal exchange rate is stated as: (Domestic currency per foreign currency).
a. The real exchange rate rises and monetary base rises.
b. The real exchange rate falls and monetary base falls.
c. The real exchange rate falls and monetary base rises.
d. The real exchange rate and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - Prior to its reform, India followed a policy of:
a. extensive growth
b. import substitution
c. export promotion
d. the Kuznets curve
e. none of the above
Question 6 - Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to remain the same and monetary base to fall.
b. Demand for real goods and services to remain the same and M2 money supply to rise.
c. Demand for real goods and services to remain the same and M2 money multiplier to remain the same.
d. Demand for real goods and services to rise and monetary base to remain the same.
Question 7 - 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 real exchange rate and monetary base in the context of the Three-Sector-Model? Assume the nominal exchange rate is stated as: (Domestic currency per foreign currency).
a. The real exchange rate rises and monetary base rises.
b. The real exchange rate falls and monetary base falls.
c. The real exchange rate rises and monetary base falls.
d. The real exchange rate and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
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