A temporary supply shock,such as a one month decrease in oil prices,would
A) increase the marginal product of capital and increase desired investment, increasing the real interest rate in equilibrium.
B) decrease the marginal product of capital and decrease desired investment, decreasing the real interest rate in equilibrium.
C) have little or no effect on desired investment, thus not changing the real interest rate by much in equilibrium.
D) increase both the marginal product of capital and the marginal product of labor in the long-term future, thus raising the real interest rate in equilibrium.
Correct Answer:
Verified
Q80: You have just purchased a home that
Q81: A temporary supply shock,such as a drought,would
A)increase
Q82: Identify two variables that shift the desired
Q83: Use a saving-investment diagram to explain what
Q84: Any change in the economy that reduces
Q86: Use a saving-investment diagram to explain what
Q87: What are the economic consequences of reductions
Q88: David consumes 200 in the current period
Q89: In the saving-investment diagram,an increase in current
Q90: If consumers believe that next year a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents