Business cycles are short-term movements in real GDP around
A) real GDP's long-term trend.
B) nominal GDP's long-term trenB.
C) real GDP per capita's long-term trenC.
D) inflation's long-term trend.

Question

Quizplus · Accepted Answer

Business cycles refer to the fluctuations in real GDP over a short period of time, typically a few months to a few years. These fluctuations occur around the long-term trend of real GDP. Therefore, option A is the correct choice. Option B is incorrect as it refers to nominal GDP, which does not take into account inflation. Option C is also incorrect as it pertains to real GDP per capita, which is a measure of economic well-being and not a measure of business cycles. Option D is incorrect as it refers to inflation, which is a separate economic phenomenon from business cycles.

Business Cycles Are Short-Term Movements in Real GDP Around