In the Real Business Cycle Model, a Persistent Increase in Total

question 36

Multiple Choice

In the real business cycle model, a persistent increase in total factor productivity

• A) has no effect on the real interest rate.
• B) unambiguously increases the real interest rate.
• C) unambiguously decreases the real interest rate.
• D) has a theoretically ambiguous effect on the real interest rate.
• E) has a theoretically ambiguous effect on the nominal interest rate.

---

Definitions:

Indirect NCI

Non-controlling interests (NCI) held by an entity indirectly through its control over intermediaries, reflecting a minority stake in the subsidiaries of the group.

Pre-acquisition Equity

Equity interest in a company that exists before a new acquisition or investment is made.

Sub-subsidiaries

Entities that are controlled by a subsidiary of a parent company, thus being one level below subsidiaries in the ownership hierarchy.

Sequence of Acquisition Dates

Refers to the chronological order in which significant ownership interests in other entities are obtained, impacting the consolidation process and valuation of investments.