Macroeconomic Forecasting Is Made More Difficult Due to the Fact

question 8

Multiple Choice

Macroeconomic forecasting is made more difficult due to the fact that

• A) deviations from trend in real GDP are persistent.
• B) turning points are hard to predict.
• C) there is no regularity in comovements.
• D) consumption is smooth.

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Definitions:

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity more efficiently than another activity.

Increasing Returns

A situation in economics where an increase in the amount of inputs leads to a greater proportional increase in the amount of output.

Factor Endowments

The amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for manufacturing and service provision.

Technology

The technical means for producing goods and services.