In Response to a Temporary Change in Total Factor Productivity

question 27

Multiple Choice

In response to a temporary change in total factor productivity, the adoption of capital controls under a flexible exchange rate

• A) amplifies the effect of this disturbance on both domestic output and the nominal exchange rate.
• B) amplifies the effect of this disturbance on domestic output and dampens the effect on the nominal exchange rate.
• C) dampens the effect of this disturbance on domestic output and amplifies the effect on the nominal exchange rate.
• D) dampens the effect of this disturbance on both domestic output and the nominal exchange rate.
• E) dampens the effect of this disturbance on both domestic output and the real exchange rate.

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Definitions:

Sample Points

Individual elements or cases chosen from a population for the purpose of statistical analysis.

CDs

Compact Discs, a digital optical disc data storage format used for storing digital data.

Mutually Exclusive

Describes two or more events that cannot occur at the same time.

P(A ∩ B)

The probability of the intersection of events A and B, meaning the likelihood that both A and B occur.