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 monetary base in the context of the Three-Sector-Model?
a. The quantity of real loanable funds rises and monetary base rises.
b. The quantity of real loanable funds rises and monetary base falls.
c. The quantity of real loanable funds and monetary base fall.
d. The quantity of real loanable funds and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 2 - If statistical analysis does not show clusters of characteristics
a. We can divide the world into economic systems
b. factors other than the economic system affect outcomes
c. growth cannot be measured accurately
d. we can study institutional economics but not comparative economic systems
e. None of the above
Question 3 - Virtual Currency System 2 (VCS2) is poses a __________ risk to nations in which is it used because ___________________________.
a. High; it can be used directly by end users to buy real-world goods and services.
b. High, it weakens central banks' abilitiesto control their monetary bases.
c. Low; it can be spent only in virtual worlds.
d. Low; when it is exchanged for real-world currencies, only a small portion of the exchange actually influences the nation's monetary base.
e. Medium; its conversion into real-world currencies causes only minor movements in nations' M2 money multiplier.
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 GDP and monetary base in the context of the Three-Sector-Model?
a. Real GDP rises and monetary base rises.
b. Real GDP rises and monetary base falls.
c. Real GDP and monetary base fall.
d. Real GDP and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - The following are features of the Asian model
a. high savings
b. low shares of government
c. large investments in human capital
d. a, b and c are correct
e. only a and c are correct
Question 6 - Virtual currency unit 1 (VCU1) is poses a __________ risk to nations in which is it used because ___________________________.
a. High; it can be used directly by end users to buy goods and services.
b. High, it weakens central banks' abilities to control their monetary bases.
c. Low; it can be earned and spent only in virtual worlds.
d. Low; purchases and sales of VCU1 change only modestly a nation's monetary base.
e. High; it is capable of causing dramatic changes in a nation's M2 money multiplier.
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