1.              The long-run trend in real GDP is upward. How is this possible given business cycles? What explains the upward trend? (5 points)

2.      What variables besides real GDP tend to decline during recessions? Given the definition of real GDP, argue that declines in these variables are to be expected. (5 points)

Answer rating: 100% (QA)

Ans1 Expansion is the phase of the business cycle where real gross domestic product GDP grows for two or more consecutive quarters moving from a troug... View the full answer