Suppose that a severe shock that decreases investment


Suppose that a severe shock that decreases investment demand hits the United States. Which of the following can we expect to occur according to the real business cycle model?

A: The real interest rate will fall.

B: The real wage rate will rise.

C: The Fed will lower the federal funds rate.

D: The structural deficit will increase.

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Business Economics: Suppose that a severe shock that decreases investment
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