Suppose That a Severe Shock That Decreases the Demand for Loanable

Multiple Choice

Suppose that a severe shock that decreases the demand for loanable funds hits the United States. Which of the following can we expect to occur according to the real business cycle model?

A) People will work fewer hours.
B) The real wage rate will fall.
C) The real interest rate will fall.
D) All of the above are true.