If Deviations from Trend in a Macroeconomic Variable Are Negatively

question 40

Multiple Choice

If deviations from trend in a macroeconomic variable are negatively correlated with deviations from trend in real GDP,that variable is said to be

• A) useless in predicting future movements in real GDP.
• B) procyclical.
• C) countercyclical.
• D) acyclical.
• E) uncorrelated.

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.

Celebrity Marriages

Marriages between individuals who are highly recognized or famous, often attracting public fascination and media attention.

Representativeness Heuristic

A mental shortcut used to judge the probability of an event by how much it resembles a typical case.

Simulation Heuristic

The simulation heuristic is a psychological theory that explains how people determine the likelihood of an event based on how easy it is to visualize the event happening.