Real consumption 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 consumption is procyclical, meaning it moves in the same direction as the overall economy, and it is generally less variable than real GDP because consumption tends to be smoother over time due to factors like consumption smoothing and the presence of durable goods.

Real Consumption Tends to Be