Assume that the expectation of declining housing prices cause households to reduce their demand for ...

Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and reserve-related (central bank) transactions remain the same.
b. Real GDP and reserve-related (central bank) transactions remain the same.
c. Real GDP rises, and reserve-related (central bank) transactions remain the same.
d. There is not enough information to determine what happens to these two macroeconomic variables.

Question 2 - If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. Monetary base to remain the same.
b. M2 money supply to fall.
c. M2 money multiplier to fall.
d. Monetary base to rise.

Question 3 - The European Union crisis was caused by:
a. Too little state spending
b. The fact that all EU members are on the euro
c. industrial planning
d. excessive government spending by weak economies
e. all of the above

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Assume that the expectation of declining housing prices cause households to reduce their demand for ...

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