The Basic Classical Model Can Account for the Procyclical Behavior

question 4

Multiple Choice

The basic classical model can account for the procyclical behavior 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:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.