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:

Psychoanalysis

A therapeutic approach founded by Freud that aims to explore unconscious conflicts driving psychological disorders.

Bed-Wetting

The involuntary urination during sleep, especially common among young children.

Emotional Conflicts

A psychological state characterized by inner turmoil and tension due to conflicting emotions or desires.

Cognitive Therapists

Mental health professionals who treat psychological issues through an emphasis on modifying dysfunctional thoughts and beliefs.