-You are given the data in Table 11.1,which covers the period 1947-2006."Mean" is the average growth over the period and "St Dev" is the standard deviation of the growth (a measure of volatility)of real output,consumption,investment,government expenditure,and net exports.From this information,you conclude that
A)households smooth their consumption more than other sectors.
B)firms base their decisions on more than the potential GDP.
C)foreigners are fickle consumers.
D)government expenditures are zero.
E)a and b are correct.

Question

-You are given the data in Table 11.1,which covers the period 1947-2006."Mean" is the average growth over the period and "St Dev" is the standard deviation of the growth (a measure of volatility)of real output,consumption,investment,government expenditure,and net exports.From this information,you conclude that
A)households smooth their consumption more than other sectors. 
B)firms base their decisions on more than the potential GDP. 
C)foreigners are fickle consumers. 
D)government expenditures are zero. 
E)a and b are correct.

Quizplus · Accepted Answer

Households tend to smooth consumption over time, leading to lower volatility compared to other sectors. Firms consider various factors beyond potential GDP, such as market conditions and expectations, in their decision-making.

-You Are Given the Data in Table 11