For the study of economic growth, it is most helpful to examine movements in ________; for the study of business cycles, it is most helpful to examine movements in ________.
A) trend GDP; deviations from trend in GDP
B) deviations from trend in GDP; deviations from trend in GDP
C) trend GDP; trend GDP
D) trend income; deviation from trend in income
E) deviations from trend in GDP; trend GDP

Question

Quizplus · Accepted Answer

For the study of economic growth, it is most helpful to examine movements in trend GDP as it shows the sustained long-term increase in the production of goods and services in an economy. On the other hand, for the study of business cycles, it is most helpful to examine deviations from trend in GDP as it shows the fluctuations in economic activity around the long-term trend.

For the Study of Economic Growth, It Is Most Helpful