Data for the U.S. economy in the 2007-09 period show that real GDP and inflation moved in the direction predicted by the economic fluctuations model.

Question

Quizplus · Accepted Answer

The economic fluctuations model predicts that real GDP and inflation will move in opposite directions during periods of recession and recovery. This is consistent with what happened during the 2007-09 period in the U.S. economy, where real GDP contracted and inflation decreased.