In response to a temporary change in total factor productivity, the adoption of capital controls under a flexible exchange rate
A) amplifies the effect of this disturbance on both domestic output and the nominal exchange rate.
B) amplifies the effect of this disturbance on domestic output and dampens the effect on the nominal exchange rate.
C) dampens the effect of this disturbance on domestic output and amplifies the effect on the nominal exchange rate.
D) dampens the effect of this disturbance on both domestic output and the nominal exchange rate.
D
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A professional basketball franchise is trying to assemble a parcel of land to build an arena. There are 25 houses on the land the franchise needs. In this case,
A) eminent domain can reduce transactions costs and make a pie-increasing arena possible. B) eminent domain can reduce the likelihood of holdouts and make a pie-increasing arena possible. C) eminent domain is not called for as the land can probably be acquired more efficiently through bargaining. D) Both A and B are correct.
If a regulator sets the price equal to the natural monopolist's marginal cost,
a. the monopoly will experience a loss b. the monopoly will earn a profit c. the monopoly will earn zero profit d. consumers will be worse off than they would be if the firm's profit maximization activities were unregulated e. the monopoly will be better off than it would be if its profit maximization activities were unregulated
Which of the following statements best describes the economist's view of finance and the financial system?
a. The financial system is very important to the functioning of the economy, and the tools of finance are often helpful to us as individuals when we find ourselves making certain decisions. b. The financial system, while interesting, is not very important to the functioning of the economy; however, the tools of finance are often helpful to us as individuals when we find ourselves making certain decisions. c. The financial system is very important to the functioning of the economy; however, the tools of finance are not particularly helpful to us as individuals since we seldom make decisions for which those tools are useful. d. The field of finance is intimately concerned with the financial system and the tools of finance, and financial economists see great importance in them; however, the "mainstream" economist sees little value in studying financial markets or the tools of finance.
Government spending programs that create jobs are often popular because
What will be an ideal response?