Experience for the United States shows that
A) consumption and GDP grow at about the same rate over the long term with GDP being less volatile over the short-term business cycle.
B) consumption grows slower than GDP over the long term with consumption being less volatile over the short-term business cycle.
C) consumption grows faster than GDP over the long term with consumption being more volatile over the short-term business cycle.
D) consumption and GDP grow at about the same rate over the long term with GDP being more volatile over the short-term business cycle.
E) consumption grows faster than GDP over the long term with GDP being more volatile over the short-term business cycle.

Question

Quizplus · Accepted Answer

Consumption and GDP tend to grow at similar rates over the long term, but GDP is more volatile over the short-term business cycle due to its broader inclusion of investment, government spending, and net exports, which can fluctuate more than consumption.

Experience for the United States Shows That