In the real business cycle framework, a technology shock that increases investment demand and the demand for loanable funds leads to a _ _ level of saving and a _ _ real interest rate.

Question

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In the real business cycle framework, a technology shock that increases investment demand leads to higher demand for loanable funds, which increases the real interest rate. As a result, the higher real interest rate encourages more saving, leading to a higher level of saving.

In the Real Business Cycle Framework, a Technology Shock That