The relationship between actual output in an economy, the long-run component, and the short-run component is given as Long-run trend =Current output + Short-run fluctuations.

Question

Quizplus · Accepted Answer

The relationship described is incorrect. The actual output in an economy is typically represented as the sum of the long-run trend (potential output) and the short-run fluctuations (cyclical component), not in the format provided.

The Relationship Between Actual Output in an Economy, the Long-Run