Question

Notice that real GDP trends upward over time but experiences ups and downs in the short run.

These short-run fluctuations in real GDP are often referred to as _____.

Small ups and downs in real GDP follow a consistent, predictable pattern.
True False

Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 2009?

Check all that apply.
__Retail sales increased.
__Industrial production declined.
__Consumer spending increased.
__Home sales declined.

Answer 1

1. These short-run fluctuations in real GDP are often referred to as business cycle

2. Small ups and downs in real GDP follow a consistent, predictable pattern.

False

3. -Retail sales increased

- Consumer spending increased

Step-by-step explanation:

1. These short-run fluctuations in real GDP are often referred to as business cycle

The economy functions in cycles that follows different stages (with moments of expansion and recession). The real gdp also changes throughout the year depending on the consumption patterns that change as the year progresses, for example at Christmas consumers consume more this is called seasonality

2. Small ups and downs in real GDP follow a consistent, predictable pattern.

False

These fluctiations dont follow regular or predictable patterns, we know that at some point the real GDP as well as the GDP will fall or rise because the business cycle but it is difficult to predict if its going to keep rising or is going to decrease.

3. -Retail sales increased

- Consumer spending increased

If the consumption form the households increases the gdp must be growing.