According to Real Business Cycle Theory, an Increase in Productivity

question 67

Multiple Choice

According to real business cycle theory, an increase in productivity _______ the demand for loanable funds, _______ the demand for labour, and _______ the supply of labour.The real interest rate will _______.

• A)increases; increases; does not change; rise
• B)increases; increases; does not change; fall
• C)increases; increases; increases; rise
• D)decreases; decreases; decreases; fall
• E)increases; increases; increases; fall

---

Definitions:

Random Selection

The process of choosing a sample from a population in such a way that each member has an equal probability of being chosen.

Random Sample

A sample drawn from a population where every member had an equal opportunity to be selected.

Sample Mean

The average of all the values in a sample, used as an estimate of the population mean.

Proportion

A statistical measure that denotes the fraction or percentage of the total that exhibits a particular trait or characteristic.