A variable is considered procyclical if it moves:

Question

Quizplus · Accepted Answer

A procyclical variable moves in the same direction as real GDP, meaning it tends to increase when the economy is in expansion and decrease during recessions. Unemployment may or may not move in the opposite direction of real GDP, depending on factors such as labor market conditions and government policies. Similarly, inflation may or may not be procyclical depending on the source of the inflationary pressure.

A Variable Is Considered Procyclical If It Moves