t.php?attempt =281623788cmid=1102907 ◻ ◻ the policy ineffectiveness proposition. the signal extraction problem. monetary equilibrium business cycle theory (MEBCT). rational expectations and dynamic time inconsistency policy analysis. Clear my choice According to the standard new Keynesian model of the business cycle, the severity of the recession was intensified by: sticky prices and wages. the mispricing of risk. the unwillingness of banks to lend money. What do new classical models have in common with the old classical model? The classical dichotomy.