None of the above 5. An increase in the marginal product of capital. An increase in the interest rate. An increase in the depreciation rate. All the above 6.
Labor is moderately procyclical.
All the above are true. According to real business cycle theory, government policy can explain nothing about business cycles. True b. False 8. Consider a general improvement in technology that increases wealth, the marginal product of labor and the marginal product of capital. In the model of chapter 12, such an improvement in technology does not predict a. procyclical investment.