Which of the following statements is true a both

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37. Which of the following statements is true? (a) Both nominal and real interest rates are procyclical and leading. (b) Both nominal and real interest rates are procyclical and lagging. (c) Nominal interest rates are procyclical and real interest rates are countercyclical. (d) Nominal interest rates are procyclical and real interest rates are acyclical. Answer: D Level of difficulty: 1 Section: 8.3 38. Using the seasonal business cycle as your guide, during which quarter would you be most likely to expect an increase in your corporation’s sales?
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126 Abel/Bernanke • Macroeconomics, Fifth Edition 39. Which of the following macroeconomic variables is the most seasonally procyclical? 40. Which of the following macroeconomic variables doesn’t vary much over the seasons? 41. What are the two main components of business cycle theories? (a) A description of shocks and a model of how the economy responds to them (b) A model of how people decide to spend and a description of the government’s role in the economy (c) A model of how equilibrium is reached and a description of the government’s role in the economy (d) A description of shocks and a description of the government’s role in the economy Answer: A Level of difficulty: 1 Section: 8.4 42. Economists use the term shocks to mean 43. Wars, new inventions, harvest failures, and changes in government policy are examples of
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Chapter 8 Business Cycles 127 44. The three main components of the aggregate demand-aggregate supply model include
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