If technology improves when a nation is in the intermediate range and only the Aggregate Supply changes, then:
a. Real GDP remains the same and average price level falls.
b. Real GDP remains the same and average price level rises.
c. Real GDP remains the same and average price level remains the same.
d. Real GDP rises and average price level falls.
e. Real GDP falls and average price level falls.
Question 2 - Assume that the central bank lowers the discount to increase the nation's monetary base. 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 reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium.
a. The quantity of real loanable funds per time period remains the same and reserve-related (central bank) transactions become more positive (or less negative).
b. The quantity of real loanable funds per time period falls and reserve-related (central bank) transactions remain 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 remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 3 - If technology improves when a nation is in the intermediate range and only the Aggregate Supply changes, then:
a. Real GDP rises and real GDP remains the same.
b. Real GDP remains the same and average price level falls.
c. Real GDP remains the same and average price level rises.
d. Real GDP rises and average price level falls.
e. Real GDP falls and average price level rises.
Question 4 - Assume that the central bank lowers the discount to increase the nation's monetary base. 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 net nonreserve international borrowing/lending balancein the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium.
a. The quantity of real loanable funds per time period remains the same and net nonreserve international borrowing/lending balance becomes more negative (or less positive).
b. The quantity of real loanable funds per time period rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive).
c. The quantity of real loanable funds per time period falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative).
d. The quantity of real loanable funds per time period and net nonreserve international borrowing/lending balanceremain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
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