Real investment tends to be
A) procyclical and less variable than real GDP.
B) procyclical and more variable than real GDP.
C) countercyclical and less variable than real GDP.
D) countercyclical and more variable than real GDP.
E) acyclical with real GDP.

Question

Quizplus · Accepted Answer

Real investment is procyclical, meaning it tends to increase during economic expansions and decrease during recessions. It is also more variable than real GDP because investment is more sensitive to changes in economic conditions.

Real Investment Tends to Be