In the Monetary Small Open-Economy Model with a Fixed Exchange

Multiple Choice

In the monetary small open-economy model with a fixed exchange rate, a temporary decrease in domestic total factor productivity in the absence of any other shocks

A) decreases output and the current account surplus.
B) increases output and the current account surplus.
C) increases output and decreases the current account surplus.
D) decreases output and increases the current account surplus.
E) leaves output unchanged and decreases the current account surplus.