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

Question

Quizplus · Accepted Answer

Short-run fluctuations in real GDP around its trend value are referred to in economics as "the business cycle". This cycle consists of expansions and contractions in economic activity, with fluctuations in output, employment, and other macroeconomic variables. It is an important topic of study in macroeconomics because understanding its causes and consequences is critical for policymakers and businesses.

Short- Run Fluctuations in Real GDP Around Its Trend Value