Suppose That in Response to a Decrease in Real Interest

question 200

Multiple Choice

Suppose that in response to a decrease in real interest rates, a person decides to reduce his labor supply today and increase it in the future. This behavior is most consistent with the

• A) new classical theory of the business cycle.
• B) Keynesian theory of the business cycle.
• C) new Keynesian theory of the business cycle.
• D) real business cycle theory.