The real business cycle model best explains the procyclicality of the nominal money by
A) an unpredictable Bank of Canada.
B) exogenous money.
C) endogenous money.
D) uncorrelated money.
E) monetary neutrality.

Question

Quizplus · Accepted Answer

The real business cycle model suggests that money supply is endogenous, meaning it responds to the economic cycle, which explains the procyclicality of nominal money.

The Real Business Cycle Model Best Explains the Procyclicality of the Nominal