In a real business cycle model, labor supply
A. increases if the nominal interest rate rises.
B. is independent of the real interest rate.
C. decreases if the real interest rate rises.
D. decreases if the real interest rate falls.
Answer:D
In a real business cycle model, labor supply
A. increases if the nominal interest rate rises. B. is independent of the real interest rate. C. decreases if the real interest rate rises. D. decreases if the real interest rate falls.