The key ripple effect in real business cycle theory is the ________ decision and it depends on the________
A)when- to- invest; real interest rate
B)where- to- work; real wage rate
C)when- to- work; real interest rate
D)what- to- save; nominal interest rate

Question

The key ripple effect in real business cycle theory is the ________ decision and it depends on the________ 
A)when- to- invest; real interest rate
B)where- to- work; real wage rate
C)when- to- work; real interest rate
D)what- to- save; nominal interest rate

Quizplus · Accepted Answer

In real business cycle theory, the decision of when to work is influenced by the real interest rate, as it affects the intertemporal substitution of labor.

The Key Ripple Effect in Real Business Cycle Theory Is