Possible Explanations for the Greater Stability of Real GDP Growth

question 55

Multiple Choice

Possible explanations for the greater stability of real GDP growth and inflation in the 1990s and early 2000s compared to the 1970s and 1980s,include all of the following except:

• A) good policymaking by central banks.
• B) good luck,including fewer adverse supply shocks.
• C) better measurement of economic variables.
• D) structural change to a more service-oriented economy.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Price

The amount of money expected, required, or given in exchange for something else, such as goods or services.

Quantity Consumers

Refers to the number of individual buyers or units purchased in the market.

Income Effect

Refers to the change in the quantity of a product demanded by consumers due to a change in their income.