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A temporary supply shock, such as a one month decrease in oil prices, would

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A temporary supply shock, such as a one month decrease in oil prices, would

A temporary supply shock, such as a one month decrease in oil prices, would
A) increase the marginal product of capital and increase desired investment, increasing the real interest rate in equilibrium.
B) have little or no effect on desired investment, thus not changing the real interest rate by much in equilibrium.
C) increase both the marginal product of capital and the marginal product of labor in the long-term future, thus raising the real interest rate in equilibrium.
D) decrease the marginal product of capital and decrease desired investment, decreasing the real interest rate in equilibrium.

Textbook

Macroeconomics

Edition: 8^th

Authors: Abel, Bernanke, Croushore

Read 286 times

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johnpaul92 Author

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8 years ago

Wow, you answered what I thought was impossible to answer, thank you!

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supaman

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8 years ago

Take care for now

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