In the Two-Period Model with Production,an Increase in Anticipated Future

question 12

Multiple Choice

In the two-period model with production,an increase in anticipated future total factor productivity

• A) has no effect on domestic output, but reduces the current account surplus.
• B) increases domestic output and increases the current account surplus.
• C) reduces domestic output, and increases the current account surplus.
• D) has no effect on domestic output, but increases the current account surplus.

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Definitions:

Equity Financing

A method of raising capital through the sale of shares in a company, thereby granting shareholders ownership interests.