Comovement can be discussed by
A) looking at the amplitude of the business cycle.
B) looking at the frequency of the business cycle.
C) looking at the peaks and troughs of the business cycle.
D) plotting the percentage deviations from trend in two economic variables.
E) economic forecasting models.

Question

Quizplus · Accepted Answer

Plotting the percentage deviations from trend in two economic variables can show how closely they move together over time, indicating comovement. It allows us to see if the two variables move in the same direction, at the same time, and to the same extent. Options A, B, and C are all related to the amplitude, frequency, and timing of the business cycle, but do not necessarily indicate comovement between two economic variables. Economic forecasting models may use comovement as a component, but they are not a direct method for measuring comovement.

Comovement Can Be Discussed by