We use a two-period model because A) the business cycle has ...

[berenicecastro]

We use a two-period model because
 
  A) the business cycle has two phases: contraction and recovery.
  B) it is the simplest dynamic model.
  C) we want to make a distinction between young and old households.
  D) this is the horizon of the politicians that formulate policy.

Question 2

If real GDP helps to predict the path of a particular macroeconomic variable, it is said to be a
 
  A) conventional variable.
  B) coincident variable.
  C) leading variable.
  D) lagging variable.

[Li Jun]

Answer to Question 1

B

Answer to Question 2

D

[berenicecastro]

TYSM

[recede]

Excellent