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An Adverse Supply Shock to the Economy Would

Question 50

Multiple Choice

An adverse supply shock to the economy would


A) decrease investment and raise the real interest rate whether the shock were temporary or permanent.
B) decrease investment,but might not raise the real interest rate if the shock were permanent.
C) decrease investment,but might not raise the real interest rate if the shock were temporary.
D) decrease investment,but definitely not raise the real interest rate.

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