The study of the short run in macroeconomics focuses
A)equally on potential GDP and actual GDP.
B)primarily on changes to potential GDP.
C)primarily on changes to the output gap with less emphasis on changes to potential GDP.
D)primarily on changes to potential GDP with less emphasis on changes in actual GDP.
E)primarily on changes to actual GDP with no interest in the output gap.

Question

Quizplus · Accepted Answer

The short run in macroeconomics primarily focuses on changes to the output gap with less emphasis on changes to potential GDP. This is because in the short run, the economy operates below or above its potential GDP and there is a focus on bringing the economy back to potential GDP.

The Study of the Short Run in Macroeconomics Focuses