Shocks to the Macroeconomy Will Cause a Change in the Equilibrium

question 22

Multiple Choice

Shocks to the macroeconomy will cause a change in the equilibrium real interest rate,except ________.

• A)permanent supply shocks
• B)aggregate demand shocks
• C)temporary supply shocks
• D)all of the above
• E)none of the above

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Definitions:

Period Cost

Costs that are expensed in the period in which they are incurred, not directly tied to production activities.

Committed Fixed Cost

Long-term fixed costs that cannot be easily altered in the short term, such as leases and depreciation on equipment.

Long-Term Equipment Lease

An agreement where a physical asset is rented for a longer duration, often exceeding one year, allowing the use of the asset without purchasing it.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant over a period.