Time bunching results in I. seasonal cycles of business activity. II. a smooth trend in real GDP over time. III. shocks having a smaller effect on the economy.

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Time bunching, also known as seasonality, refers to the regular pattern of business activity that occurs in certain months due to holidays, weather patterns, and other factors. This results in seasonal cycles of economic activity, which can be seen in industries such as retail and tourism. Time bunching does not necessarily result in a smooth trend in real GDP over time or a smaller impact from shocks on the economy.

Time Bunching Results in I