In real business cycle theory, a decrease in productivity leads to all of the following events EXCEPT .

Question

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According to real business cycle theory, a decrease in productivity will lead to a decrease in the demand for labor, a fall in investment demand, and a fall in the real interest rate. However, it will not lead to a rise in the real wage rate, since the decrease in productivity means that workers are producing less per unit of labor, so their marginal product is lower and their wage rate should fall as well.

In Real Business Cycle Theory, a Decrease in Productivity Leads