Figure 8-4

-Employing Figure 8-4 above in the time periods t0 to t1,and t4 to t5 real GNP is ________;from t1 to t2,t3 to t4,and beyond t5 real GNP is ________.

Question

Figure 8-4
 
-Employing Figure 8-4 above in the time periods t0 to t1,and t4 to t5 real GNP is ________;from t1 to t2,t3 to t4,and beyond t5 real GNP is ________.

Quizplus · Accepted Answer

From t0 to t1, real GNP is decreasing as there is a contraction in the economy shown by a decrease in total spending. From t1 to t2, real GNP is increasing as there is an expansion in the economy shown by an increase in total spending. From t3 to t4, real GNP is decreasing again as there is a contraction in the economy. From t4 to t5, real GNP is decreasing as there is a decrease in total spending. Beyond t5, real GNP is increasing as there is an upward trend in total spending, indicating an expansion in the economy. Therefore, the correct answer is D.

Figure 8-4 -Employing Figure 8-4 Above in the Time Periods T0 to Time