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Changes in the Money Supply in the New Keynesian Model

Question 70

Multiple Choice

Changes in the money supply in the New Keynesian model are NOT a likely explanation of the typical business cycle, because the model counterfactually predicts that


A) the real wage is procyclical.
B) investment is procyclical.
C) the real wage is countercyclical.
D) employment is procyclical.
E) consumption is procyclical.

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