A beneficial productivity shock would ________ output,________ the real interest rate,and ________ the price level.
A)increase;decrease;increase
B)increase;decrease;decrease
C)increase;increase;decrease
D)decrease;decrease;increase

Question

Quizplus · Accepted Answer

A beneficial productivity shock increases output as firms can produce more efficiently. It decreases the real interest rate because the increased supply of goods reduces the need for high interest rates to balance savings and investment. It decreases the price level due to the increased supply of goods, which puts downward pressure on prices.

A Beneficial Productivity Shock Would ________ Output,________ the Real Interest

A Beneficial Productivity Shock Would Output, the Real Interest