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.
Correct Answer:

Verified
Correct Answer:
Verified
Q4: You have just read that Australia has
Q45: The FE line is vertical because the
Q46: A temporary decline in government purchases would
Q47: Any change that reduces desired saving relative
Q48: An increase in the expected future marginal
Q49: Classical economists argue that an increase in
Q51: Which of the following would shift the
Q52: An increase in money demand causes the
Q54: An adverse supply shock that is permanent
Q79: When all markets in the economy are