In the classical view of the credit market, a rise in saving produces a rise in investment via a

In the circular flow model

A) households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from firms. B) households demand goods and services which are supplied by firms, and the firms demand resources that are supplied by intermediate firms. C) households buy goods and services and firms supply goods. Resources are supplied by other firms. D) households demand goods and services that are supplied by firms, while supplying resources that are demanded by firms.

Which of the following is likely to reduce the total efficiency units of labor in an economy?

A) A decrease in the price of capital B) A recession that lowers aggregate demand C) An increase in the price level D) An earthquake that kills several people