Which of the following is not an automatic stabilizer:
a. Personal income taxes.
b. Business profits taxes.
c. Welfare payments.
d. Government spending for new bridges and roads.
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 GDP Price Index 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 GDP Price Index remains the same and reserve-related (central bank) transactions become more positive (or less negative).
b. The GDP Price Index falls and reserve-related (central bank) transactions remain the same.
c. The GDP Price Index and reserve-related (central bank) transactions remain the same.
d. The GDP Price Index 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 - Joseph Stiglitz has argued in favor of the transition policies carried out by international institutions.
a. True
b. False
Question 4 - Which of the following is not an automatic stabilizer:
a. Business profits taxes.
b. Welfare payments.
c. Government spending for new bridges and roads.
d. All of the above are examples of automatic stabilizers.
Question 5 - 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 GDP Price Index 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 GDP Price Index remains the same and net nonreserve international borrowing/lending balance becomes more negative (or less positive).
b. The GDP Price Index rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive).
c. The GDP Price Index falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative).
d. The GDP Price Index 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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