In the data, which of the following is most volatile?
A) real GDP
B) consumption of durables
C) consumption of nondurables
D) consumption of services
E) aggregate income

Question

Quizplus · Accepted Answer

Consumption of durables is the most volatile among the given options due to its high sensitivity to changes in consumer confidence and economic conditions. Durables are typically more expensive items such as cars, appliances, and furniture that people may hold off purchasing during tough economic times, resulting in greater volatility in consumption. Real GDP and aggregate income are broader indicators of economic activity, and while they may show fluctuations, they are not as directly impacted by consumer behavior as consumption of durables. Consumption of nondurables and services are typically more stable and less sensitive to economic fluctuations.

In the Data, Which of the Following Is Most Volatile