In Response to a Temporary Change in Total Factor Productivity,the

question 35

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.

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Definitions:

Average Return

The simple mathematical average of a series of returns generated over a period of time.

NPV Technique

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the net present value of all cash flows associated with it.

Mutually Exclusive

Events or choices that cannot occur or be taken at the same time.

Capital Projects

Large, longer-term investments undertaken by a business or government to create, maintain, or expand its operational capacity.