The Basic Classical Model Can Account for the Procyclical Behaviour

question 44

Multiple Choice

The basic classical model can account for the procyclical behaviour of money if there

• A)are real business cycles caused by productivity shocks.
• B)is reverse causation from future output to money.
• C)are rational expectations among the public.
• D)are propagation mechanisms in the economy.

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Definitions:

Immoderation

The action or habit of not restraining oneself from indulgence in activities, often leading to excess or extreme behavior.

Anger

A strong feeling of annoyance, displeasure, or hostility triggered by what is perceived as wrong or injustice.

Big Five Trait

A framework outlining five extensive traits that characterize human personality: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism.

Depression

A common and serious mental health condition marked by persistent feelings of sadness, emptiness, or hopelessness.