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:

Project Scope

The part of project planning that involves defining clear, specific goals, deliverables, tasks, costs, and deadlines.

Master Schedule

A comprehensive timeline that outlines all major tasks and milestones within a project, serving as a roadmap for execution.

Dependency

A situation where one task or activity cannot start or finish until another has been completed.

Lead Time

The time interval between the initiation and completion of a process, such as the period from ordering to receiving goods.