Investment demand shocks in the New Keynesian model are not a likely explanation of the typical business cycle,because the model counterfactually predicts that
A) consumption is procyclical, investment is procyclical, and average labour productivity is countercyclical.
B) prices are procyclical, the real wage is countercyclical, and average labour productivity is countercyclical.
C) prices are countercyclical, the real wage is countercyclical, and average labour productivity is countercyclical.
D) employment is procyclical, prices are procyclical, and average labour productivity is countercyclical.
E) employment is procyclical, employment is procyclical, and average labour productivity is countercyclical.
Correct Answer:
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