Which of the Following Correctly Describes the New Classical Cycle

question 387

Multiple Choice

Which of the following correctly describes the new classical cycle theory of the business cycle?

• A) An expected tax rate change can trigger a business cycle.
• B) An expected change in the level of exports can trigger a business cycle.
• C) Rational expectations keep the money wage from changing quickly.
• D) An unexpected change in the quantity of money can trigger a business cycle.