Chap 3 - Chap 3 1. The primary defining feature of business...

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Chap 3 1. The primary defining feature of business cycles is that they are fluctuations about trend in real gdp. 2. Besides persistence, 3 other features of the deviations from trend in real GDP are: the time series of deviation from trend in real gdp is quite choppy; there is no regularity in the amplitude of fluctuations in real gdp about trend (peaks and troughs can represent large and small deviations from trend); there is no regularity in the frequency of fluctuations in real gdp about trend (length of time between peaks and troughs in real gdp varies considerably) 3. Forecasting GDP over the long term is difficult because the choppiness of fluctuations in real gdp will make these fluctuations difficult to predict, while the lack of regularity in the amplitude and frequency of fluctuations implies that it is difficult to predict the severity and length of recssions 4. Comovements in aggregate economic variables are important because they exhibit strong regularities.
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This note was uploaded on 01/08/2012 for the course ECON 2400 taught by Professor Tasso during the Spring '09 term at York University.

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