According to Real Business Cycle Theorists,the Tendency of Money to Lead

question 5

Multiple Choice

According to real business cycle theorists,the tendency of money to lead output may be due to

• A) government spending shocks, which lead to later changes in economic activity, and the tendency for bank loans to expand in advance of real activity that will occur at a later date.
• B) the tendency for bank loans to expand in advance of real activity that will occur at a later date and the Bank of Canada's use of all available information in trying to stabilize the price level.
• C) the Bank of Canada's use of all available information in trying to stabilize the price level and the Bank of Canada's use of all available information in trying to stabilize the level of economic activity.
• D) the Bank of Canada's use of all available information in trying to stabilize the level of economic activity and government spending shocks, which lead to later changes in economic activity.
• E) the Bank of Canada's use of all available information in trying to stabilize business cycle fluctuations and the price level.

---

Definitions:

Kruskal-Wallis Test

A statistical test that doesn't rely on parameter assumptions to evaluate if notable differences exist between two or more independent variable groups, focusing on a continuous or ordinal dependent variable.

Distribution

The spread of values of a variable or the frequencies of occurrence of different possible outcomes in a dataset.

Sign Test Statistic

A test that does not assume a specific data distribution, employed to evaluate if paired observations have a median that differs.

Sign Test

A nonparametric statistical test used to determine if there is a median difference between paired observations.