The basic RBC model predicts ________ movements in the price level,which in fact occur ________ in the U.S.economy.
A)countercyclical,only occasionally
B)countercyclical,most of the time
C)procyclical,only occasionally
D)procyclical,most of the time

Question

Quizplus · Accepted Answer

The basic Real Business Cycle (RBC) model predicts countercyclical movements in the price level, meaning prices tend to move in the opposite direction of the business cycle. However, in the U.S. economy, such countercyclical movements occur only occasionally, as prices often do not move counter to the cycle.

The Basic RBC Model Predicts ________ Movements in the Price