Of the following, which statistic do economists use to measure the business cycle?
A) Changes in the inflation rate
B) Changes in real gross domestic product
C) Changes in the value of imports
D) Changes in the implicit price deflator

Question

Quizplus · Accepted Answer

Economists use changes in real gross domestic product (GDP) to measure the business cycle. Real GDP measures the value of all goods and services produced in an economy after adjusting for inflation. Changes in real GDP reflect the expansion and contraction of the economy, which is the basic definition of the business cycle. The other choices are not directly related to the business cycle. Changes in the inflation rate and the implicit price deflator are indicators of price level changes, while changes in the value of imports are an indicator of international trade.

Of the Following, Which Statistic Do Economists Use to Measure