Defining $Y _ { t }$ as current output, $\bar { Y } _ { t }$ as potential output, and $\tilde { Y } _ { t }$ as short-run fluctuations, the relationship between the three can be written as $Y _ { t } = \tilde { Y } _ { t } - \bar { Y } _ { t }$ .

Question

Defining $Y _ { t }$  as current output, $\bar { Y } _ { t }$  as potential output, and $\tilde { Y } _ { t }$  as short-run fluctuations, the relationship between the three can be written as $Y _ { t } =  \tilde { Y } _ { t } - \bar { Y } _ { t }$  .

Quizplus · Accepted Answer

The correct relationship is $Y _ { t } = \bar { Y } _ { t } + \tilde { Y } _ { t }$, where current output is the sum of potential output and short-run fluctuations.

Defining YtY _ { t }Yt​ As Current Output Yˉt\bar { Y } _ { t }Yˉt​

Defining $Y _ { t }$ As Current Output $\bar { Y } _ { t }$