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If the Real Interest Rate Is 4 Percent and Workers

Question 231

Multiple Choice

If the real interest rate is 4 percent and workers expect real wages to be 2 percent year higher next year, according to real business cycle theory, workers will work


A) more this year and less next year.
B) less this year and less next year.
C) more this year and more next year.
D) less this year and more next year.

Correct Answer:

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