Which of the following parts of real GDP fluctuates most over the course of the business cycle?
A)consumption
B)government expenditures
C)investment
D)net exports

Question

Quizplus · Accepted Answer

Investment spending typically fluctuates the most over the course of the business cycle. This is because businesses tend to be more optimistic and willing to invest in new projects during periods of economic expansion, while they may be more cautious and cut back on new investments during recessions. Consumption and government expenditures tend to be more stable, while net exports depend on global economic conditions outside of a country's control.

Which of the Following Parts of Real GDP Fluctuates Most