Multiple Choice
According to the real business cycle model, the correlation between changes in the money supply and changes in output over the business cycle results from
A) changes in money causing changes in output.
B) changes in output causing changes in the demand for money, which leads the Fed to make changes in the money supply.
C) increases and decreases in the federal budget deficit, causing both the changes in money and the changes in output.
D) chance; the real business cycle model offers no other explanation for it.
Correct Answer:
Verified
Correct Answer:
Verified
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