A business cycle refers to ___________ movements in _________ around ________.
A) short-run; unemployment; a long-term trend in real GDP
B) short-run; real GDP; a long-term trend in real GDP
C) short-run; real GDP; a long-term trend in unemployment rates
D) long-run; real GDP; short-run real GDP

Question

Quizplus · Accepted Answer

A business cycle refers to short-run movements in real GDP around a long-term trend in real GDP. Option A is incorrect because unemployment is a factor within the business cycle and not the main focus. Option C is incorrect because it confuses the main factors of the business cycle. Option D is incorrect because a long-run trend in real GDP is not fluctuating, while a business cycle focuses on short-run fluctuation.

A Business Cycle Refers to ___________ Movements in _________ Around

A Business Cycle Refers to ___ Movements in _ Around