Business cycles are short-term movements in:
A) real GDP around its long-term trend.
B) nominal GDP around its long-term trend.
C) the unemployment rate above and below zero.
D) inflation around its long-term trend.

Question

Quizplus · Accepted Answer

Business cycles refer to short-term fluctuations in the economy around its long-term trend. Real GDP represents the total output of goods and services in an economy adjusted for inflation, making it the best choice for tracking business cycles. Nominal GDP and inflation may also fluctuate in the short-term, but they include changes in prices that may not reflect actual changes in economic activity. The unemployment rate can also be used to track business cycles, but it only measures a specific aspect of the economy (labor market) and may not be as comprehensive as GDP.

Business Cycles Are Short-Term Movements In