Real Business Cycle Theorists Are Critical of Monetarist Reduced-Form Evidence

question 22

Multiple Choice

Real business cycle theorists are critical of monetarist reduced-form evidence because they believe

• A)money is the most important cause of changes in aggregate demand.
• B)there is reverse causation from the business cycle to money.
• C)there is reverse causation from money to the business cycle.
• D)business cycles do not exist.

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Definitions:

Frustration Aggression Hypothesis

A psychological theory suggesting that aggression is often the result of experiencing frustration from blocked goals or desires.

Electric Shocks

The application of electrical current to the body, often used in psychological experiments to study fear or pain responses.

Displacement

Displacement is a psychological defense mechanism where an individual redirects their emotions or reactions from the original source of distress to a more acceptable or less threatening target.

Freudian Concept

Pertains to the theories and ideas proposed by Sigmund Freud, focusing on unconscious processing, psychosexual development, and defense mechanisms, among others.