Business-cycle macroeconomics involves changes in Real GDP around a ____________ LRAS curve,while economic-growth macroeconomics deals with increases in Real GDP resulting from a ______________ LRAS curve.
A) rightward-shifting; fixed
B) fixed; leftward shifting
C) leftward shifting; fixed
D) fixed; rightward-shifting

Question

Quizplus · Accepted Answer

Business-cycle macroeconomics involves short-term fluctuations in Real GDP, which occur around a fixed LRAS curve. In contrast, economic-growth macroeconomics focuses on long-term increases in Real GDP resulting from a rightward shift of the LRAS curve, indicating an increase in the production capacity of the economy. Therefore, the best choice is D, where economic-growth macroeconomics deals with a rightward-shifting LRAS curve.

Business-Cycle Macroeconomics Involves Changes in Real GDP Around a ____________