The Equilibrium Effects of a Temporary Increase in Total Factor

question 55

Multiple Choice

The equilibrium effects of a temporary increase in total factor productivity include

• A) an increase in the real wage and an increase in the real interest rate.
• B) an increase in the real wage and a decrease in the real interest rate.
• C) a decrease in the real wage and an increase in the real interest rate.
• D) a decrease in the real wage and a decrease in the real interest rate.
• E) only a decrease in the real interest rate.

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