Common Sense Suggests (And Macroeconomists Agree!)that Sustained Economic Growth Over

question 46

Essay

Common sense suggests (and macroeconomists agree!)that sustained economic growth over extended time periods is more important than the economy's short-term fluctuations.Why,then,do macroeconomists (and policymakers,and the general public)care so much about the business cycle?

---

Definitions:

Variable Costs

Expenditures that fluctuate in relation to business activity levels, including costs linked to production volume or service intensity.

Cross-Over Point

The point at which two different strategies, actions, or processes result in the same outcome or cost, often used in analysis to decide between alternatives.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Annual Demand

The total quantity of a product or service that is expected to be sold or used in one year.