Which of the following is correct?
A) Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy.
B) Real GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.
C) Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy.
D) Nominal GDP is the variable most commonly used to measure short-run economic fluctuations. It is almost impossible to predict these fluctuations with much accuracy.

Question

Quizplus · Accepted Answer

Real GDP is the variable most commonly used to measure short-run economic fluctuations. However, it is almost impossible to predict these fluctuations with much accuracy as they are affected by a multitude of factors, such as changes in consumer and business spending, government policies, and international trade. Nominal GDP, on the other hand, does not account for inflation and therefore is not an accurate measure of economic fluctuations.

Which of the Following Is Correct