In the Real Business Cycle Framework, a Technology Shock That

question 77

Multiple Choice

In the real business cycle framework, a technology shock that increases investment demand and the demand for loanable funds leads to a _ quantity of saving and a _ real interest rate.

• A)higher; lower
• B)lower; lower
• C)lower; higher
• D)higher; higher

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Definitions:

Vertical Price Fixing

An agreement among participants on different levels of the same supply chain to control prices passed on to consumers.

Tying Arrangement

A business agreement in which the sale of one product or service is linked to the purchase of an additional product or service.

Exclusive Dealing

A sales strategy where a seller requires a buyer to purchase only its products and not those of competitors.

Vertical Price Fixing

An illegal practice where parties at different levels of the same supply chain (such as manufacturers and retailers) agree to set and maintain prices at a certain level.