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A procyclical variable in macro rerers to a variable that moves in the direction of the business cycle. For example, in the boom when GDP

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A procyclical variable in macro rerers to a variable that moves in the direction of the business cycle. For example, in the boom when GDP rises, so does the employment and capital stock, making both of them pro-cyclical. If the variable moves in the opposite direction of the business cycle then it is called countercyclical. If returns from asset A are procyclical and returns on asset B are countercyclical, and everyone is the economy is strictly riskaverse and treats consumption in both states symmetrically, which of the following statements are true? Select one: 0 3. Insufcient information O b. Asset B has lower price 0 c. Both assets have equal prices 0 d. Asset A has lower price

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