The business cycle is the
A) regular growth rate of the real GDP.
B) regular fluctuations of real GDP below potential GDP.
C) irregular fluctuations of prices around real GDP.
D) irregular fluctuations of real GDP around potential GDP.

Question

Quizplus · Accepted Answer

The business cycle refers to the irregular expansions and contractions of economic activity around the economy's long-term growth trend, which is represented by potential GDP. These fluctuations include periods of rapid economic growth (expansions) and periods of decline or slower growth (recessions or contractions).

The Business Cycle Is the