According to Real Business Cycle Theory, an Increase in Productivity

Multiple Choice

According to real business cycle theory, an increase in productivity ________ the demand for loanable funds, ________ the demand for labour, and ________ the supply of labour. The real interest rate will ________.

A) increases; increases; does not change; fall
B) increases; increases; does not change; rise
C) decreases; decreases; decreases; fall
D) increases; increases; increases; rise
E) increases; increases; increases; fall