According to the text, which of the following can be used to characterize potential output?
i. Assume a perfectly smooth trend is passing through the quarter-to-quarter movements in the real GDP.
ii. Take averages of the surrounding actual GDP numbers.
iii. Gather current data from statistical agencies, such as the Bureau of Economic Analysis.

Question

Quizplus · Accepted Answer

i) Assume a perfectly smooth trend is passing through the quarter-to-quarter movements in the real GDP is one of the methods used to characterize potential output.
ii) Taking averages of the surrounding actual GDP numbers is another method to characterize potential output.
iii) Gathering current data from statistical agencies, such as the Bureau of Economic Analysis, is not a method to characterize potential output. It is used to calculate actual GDP.

According to the Text, Which of the Following Can Be