On a graph showing real national income on the vertical axis and time on the horizontal axis, the fluctuations of real national income around the trend- line would indicate the
A)distribution of income.
B)inflation rate.
C)business cycle.
D)unemployment rate.
E)path of potential output.

Question

Quizplus · Accepted Answer

Fluctuations of real national income around the trend-line would indicate the business cycle, as it reflects the short-term cyclical fluctuations in economic activity. The other options are not directly related to the fluctuations of real national income.

On a Graph Showing Real National Income on the Vertical