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 net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. Real GDP falls, and net nonreserve-related international borrowing/lending does not change.
e. 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 rise.
b. M2 money supply to fall.
c. M2 money multiplier to fall.
d. Monetary base to remain the same.
Question 3 - After its reforms in the late 1970s, China followed a policy of
a. Nationalization of all enterprises
b. export of technology
c. free economic zones
d. import substitution
e. industrial planning
Question 4 - 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 real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP falls, and nominal value of the domestic currency rises.
b. Real GDP falls, and nominal value of the domestic currency remains the same.
c. Real GDP rises, and nominal value of the domestic currency rises.
d. Real GDP falls, and nominal value of the domestic currency falls.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. Monetary base to fall.
b. M2 money supply to fall.
c. M2 money multiplier to remain the same.
d. M2 money multiplier to fall.
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