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 the business cycle. True or false

Answer 1

The correct answer is:

True

Step-by-step explanation:

The business cycle is a model that let see how the GDP of a country changes through time. Business cycle is classified in four different stages peak, trough, contraction, and expansion. These kind of fluctuations normally occur in the trade, production and all the economic activity of a country. The business cycle refers to the changes or fluctuations that can be experienced in the economic model measured by the GDP (Gross Domestic Product) and it is reflected in the increases or decreases in economy.