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 GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive).
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 2 - Spending VCU4 on real-world goods and services causes the nation's:
a. Monetary base to remain the same.
b. M2 money supply to fall.
c. Monetary base to fall.
d. M2 money supply to rise.
Question 3 - The theory of relative backwardness
a. formulated by Rostow
b. called for substitutions for missing preconditions
c. explained the industrial revolution
d. was an idea of Gerschenkron
e. both b and d are correct
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 the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
b. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).
c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
d. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - Spending VCU4 on real-world goods and services causes the nation's:
a. Monetary base to rise.
b. M2 money multiplier to rise.
c. M2 money multiplier to fall.
d. Monetary base to remain the same.
Question 6 - European countries (relative to the United States)
a. have a higher share of bank loans to GDP
b. have a higher market capitalization
c. have more IPOs
d. rely on insider trading
e. none of the above
Question 7 - 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 highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and nominal value of the domestic currency rises.
b. There is not enough information to determine what happens to these two macroeconomic variables.
c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same.
d. The real risk-free interest rate falls, and nominal value of the domestic currency falls.
e. The real risk-free interest rate rises, and nominal value of the domestic currency falls.
Question 8 - Spending VCU4 on real-world goods and services causes 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 supply to rise.
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