Business cycles examine _ time horizons, while growth theory focuses on _ time horizons

Business Dec 23, 2020

Business cycles examine _____ time horizons, while growth theory focuses on _____ time horizons.

a. short-run; long-run

b. long-run; short-run

c. Both focus on short-run time horizons.

d. Both focus on long-run time horizons.

Expert Solution

a. short-run; long-run

Business cycles normally focus on or look after short-term variations in economic activities i.e five years or less while the growth theory is more long-term oriented i.e it centers around long-term variations and improvements in the economy. The time horizon for growth theory is more than five years.

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