The Fact That ________ Almost as Sharply as GDP in the Smets-Wouters

Multiple Choice

The fact that ________ almost as sharply as GDP in the Smets-Wouters DSGE model ________.

A) inflation rises; supports the Phillips curve analysis
B) employment falls; provides insight into the nature of Okun's law
C) consumption rises; contradicts consumption smoothing
D) interest rates fluctuate; demonstrates that real interest rates are constant
E) tax revenues increase; reinforces Ricardian equivalence