Consider short-run fluctuations in real GDP around its trend value.We can say that such fluctuations are
A)generally ignored by economists,because these fluctuations do not affect behaviour of other variables such as the unemployment rate.
B)generally ignored by economists,because these fluctuations are constant and predictable.
C)referred to in economics as "background noise."
D)referred to in economics as "the business cycle."
E)unimportant to the study of macroeconomics.

Question

Quizplus · Accepted Answer

Short-run fluctuations in real GDP around its trend value are referred to in economics as "the business cycle." These fluctuations are important to the study of macroeconomics as they directly affect many variables such as the unemployment rate, inflation, and interest rates, among others.

Consider Short-Run Fluctuations in Real GDP Around Its Trend Value