If deviations from trend in a macroeconomic variable are negatively correlated with deviations from trend in real GDP, that variable is said to be
A)acyclical.
B)uncorrelated.
C)countercyclical.
D)useless in predicting future movements in real GDP.
E)procyclical.

Question

Quizplus · Accepted Answer

If a variable is negatively correlated with real GDP, it is countercyclical. This means that it tends to move in the opposite direction of the overall economy, and could potentially be useful in predicting future movements in real GDP.

If Deviations from Trend in a Macroeconomic Variable Are Negatively