In Response to a Temporary Change in Total Factor Productivity

question 48

Multiple Choice

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

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

---

Definitions:

Unionized Workforce

A workforce that is organized into trade or labor unions, aiming to promote members' rights, wages, and working conditions through collective bargaining.

Economic Sociologists

Scholars who study the social cause and effect of various economic phenomena, including markets, organizational behaviors, and economic policies.

Regulated Markets

Markets that are subject to oversight and control by government or other regulatory bodies to ensure fair practices and protect consumers.

Free Market

In a free market, prices are determined only by supply and demand.