Over the business cycle,
A) real GDP fluctuates around its trend.
B) neither real GDP nor potential GDP fluctuates because they just grow smoothly along their trends.
C) only real GDP fluctuates around its trend and potential GDP remains equal to its trend.
D) only potential GDP fluctuates around its trend and real GDP remains equal to its trend.
E) potential GDP fluctuates around its trend.
A
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Why do trade-offs occur? How are budget constraints related to trade-offs?
What will be an ideal response?
Since Social Security benefits are paid from current contributions, the system is a
A) privatized system. B) overfunded system. C) "pay-as-you-go" system. D) defined contribution system.
Hughes and Cain (2011) ask: Who suffered from the tariff in the 19th century? What was their answer?
(a) the government (b) producers of import-competing goods (c) consumers (d) workers in import-competing industries
In New Zealand one worker can produce 40 walking sticks or 10 boomerangs each hour. What is the opportunity cost of producing one walking stick?
a. 40 boomerangs b. 10 boomerangs c. 4 boomerangs d. 1/4 of a boomerang e. 1/2 worker