In the Real Intertemporal Model,an Increase in Credit Market Risk

question 30

Multiple Choice

In the real intertemporal model,an increase in credit market risk implies

• A) output demand shifts left and output supply shifts right, increasing the real interest rate.
• B) output demand shifts right and output supply shifts left, the real interest rate is constant.
• C) output demand shifts left and output supply shifts left, decreasing the real interest rate.
• D) output demand shifts left and output supply is constant, increasing the real interest rate.
• E) output demand shifts left and output supply shifts right, decreasing the real interest rate.