If technology improves when a nation is in the intermediate range and only the Aggregate Supply changes, then:
a. Real GDP rises and average price level falls.
b. Real GDP rises and real GDP remains the same.
c. Real GDP remains the same and average price level falls.
d. Real GDP remains the same and average price level rises.
e. Real GDP remains the same and average price level remains the same.
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 the nominal value of the domestic currency 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 rises and nominal value of the domestic currency remains the same.
b. The quantity of real loanable funds per time period falls and nominal value of the domestic currency remains the same.
c. The quantity of real loanable funds per time period and nominal value of the domestic currency remain the same.
d. The quantity of real loanable funds per time period 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 3 - If technology improves when a nation is in the intermediate range and only the Aggregate Supply changes, then:
a. Real GDP rises and average price level rises.
b. Real GDP rises and average price level falls.
c. Real GDP rises and real GDP remains the same.
d. Real GDP remains the same and average price level falls.
e. Real GDP remains the same 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 real GDP 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 falls and real GDP falls.
b. The quantity of real loanable funds per time period rises and real GDP rises.
c. The quantity of real loanable funds per time period rises and real GDP remains the same.
d. The quantity of real loanable funds per time period and real GDP remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - If tariffs are effective, they tend to:
a. Increase consumption.
b. Decrease government spending.
c. Increase net exports.
d. Have their major effect on a nation's automatic stabilizers.
e. Decrease net exports.
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