Suppose That a Severe Shock That Decreases the Demand for Loanable

question 284

Multiple Choice

Suppose that a severe shock that decreases the demand for loanable funds 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) People will work fewer hours.
• C) The real wage rate will fall.
• D) All of the above are true.

---

Definitions:

Illegal Lobbying

Lobbying activities that violate laws or regulations, often involving corruption or undue influence on government officials.

Antitrust Violation

An action or conduct that undermines the competitive process, including practices deemed unlawful under antitrust laws, such as monopolization, cartels, and mergers that reduce competition.

Price-fixing

An agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, not allowing market forces to determine prices.

Tying Contracts

Agreements where a seller requires a buyer to purchase additional goods as a condition of buying a desired product, often seen as anticompetitive.