Aggregation is the process of
A)calculating real GDP based on nominal GDP and the price index.
B)summing individual economic variables to obtain economywide totals.
C)forecasting the components of GDP.
D)predicting when recessions will occur.

Question

Quizplus · Accepted Answer

Aggregation refers to the process of combining or summing individual economic variables to obtain economywide totals. This can be seen in the calculation of GDP, where various components such as consumption, investment, government spending, and net exports are aggregated to obtain the total output of the economy. Option A is incorrect as it describes the process of calculating real GDP, which involves adjusting nominal GDP for changes in the price level. Option C is incorrect as it refers to forecasting GDP components, and not the actual process of aggregation. Option D is incorrect as predicting recessions involves analyzing various economic indicators and factors, rather than simply aggregating economic variables.

Aggregation Is the Process of