The defining feature of business cycles is that they
A)are inherently bad.
B)measure prospects for future growth in the economy.
C)represent the underlying trend of real GDP in the economy.
D)are fluctuations about trend in real GDP.
E)measure standards of living and productivity.

Question

Quizplus · Accepted Answer

Business cycles refer to fluctuations in real GDP around its long-term trend. This means that it represents the ups and downs of economic growth, rather than a measure of prospects for future growth or standards of living and productivity. While the ups and downs of the business cycle can have negative impacts on individuals and sectors of the economy, the cycles themselves are not inherently bad or good.

The Defining Feature of Business Cycles Is That They