When There Is a Temporary Shock to Output (Positive or Negative)

question 126

Multiple Choice

When there is a temporary shock to output (positive or negative) , what happens to consumption in an open economy?

• A) It is unchanged.
• B) It changes by exactly the same amount as output.
• C) It changes by more than the temporary output gain or loss by a factor of (1 + r^*) / r^*.
• D) It changes by less than the temporary output gain or loss by a factor of r^* / (1 + r^*).

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Definitions:

Positively Charged

Having a net positive electric charge due to the loss of electrons or an excess of protons.

Side Chain

The group of atoms attached to the main chain or backbone of a molecule, which can influence the molecule's properties and reactivity.

L-Tryptophan

An essential amino acid used by the body to produce serotonin, vital for normal sleep and mood.

Biological pH

Refers to the pH level within a living organism, which is crucial for maintaining the proper functioning of cells and biological processes.