In the Real Intertemporal Model, an Increase in Credit Market

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.