For the study of economic growth, it is most helpful to examine movements in ________; for the study of business cycles, it is most helpful to examine movements in ________.
A)trend income; deviation from trend in income
B)trend GDP; trend GDP
C)deviations from trend in GDP; trend GDP
D)trend GDP; deviations from trend in GDP
E)deviations from trend in GDP; deviations from trend in GDP

Question

Quizplus · Accepted Answer

For the study of economic growth, it is most helpful to examine movements in trend GDP, as this allows for the analysis of long-term changes in the size of the economy. For the study of business cycles, it is most helpful to examine deviations from trend in GDP, as this allows for the analysis of short-term fluctuations in economic activity.

For the Study of Economic Growth, It Is Most Helpful