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

question 68

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)increases the domestic money supply and decreases the current account surplus.
• B)decreases the current account surplus and increases the price level.
• C)increases the current account surplus and decreases the domestic money supply.
• D)increases the current account surplus and increases the domestic money supply.
• E)decreases the domestic money supply and decreases the current account surplus.

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