In the Monetary Small Open-Economy Model with a Fixed Exchange

question 44

Multiple Choice

In the monetary small open-economy model with a fixed exchange rate, a temporary decrease in domestic total factor productivity in the absence of any other shocks

• A)decreases output and the current account surplus.
• B)leaves output unchanged and decreases the current account surplus.
• C)decreases output and increases the current account surplus.
• D)increases output and the current account surplus.
• E)increases output and decreases the current account surplus.

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Definitions:

Injunction

A court order that prohibits certain activities.

Court Order

A legal document issued by a court that requires a person or entity to either do or not do a particular action.

Partnerships

Collaborative arrangements where two or more people co-manage a business and share its financial outcomes, emphasizing the joint effort in business ventures.

Private Corporations

Companies owned by private individuals or entities, not traded publicly on stock exchanges, and not owned by government entities.