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.

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Definitions:

Random Variable

A variable that can take on different numerical values based on the outcome of a random event.

Discrete

A term describing any set of data that can only take on specific, distinct values and cannot be subdivided meaningfully, such as countable items.

Continuous

Pertains to quantities that can assume an infinite number of values within a given range.

Categorical

Describes variables that can take on one of a limited and usually fixed number of possible values, assigning each individual or other unit of observation to a particular group or nominal category.