Question: If we run an experiment using our model to see if a given exogenous variable is a cause of the business cycle and our results


If we run an experiment using our model to see if a given exogenous variable is a cause of the business cycle and our results do not match the behavior observed in the data, what are the possible explanations for this mismatch between our experiment results and the data? Suppose we run an experiment with our model in which we increase government spending (G). What are the equilibrium effects on aggregate output (Y), consumption (C), and employment (N)? Given the results of the experiment and our knowledge of business cycle co-movements, explain whether or not uctuations in government spending are a likely cause of business cycles
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