Over the business cycle,
A) real GDP fluctuates around its trend.
B) neither real GDP nor potential GDP fluctuates because they just grow smoothly along their trends.
C) only real GDP fluctuates around its trend and potential GDP remains equal to its trend.
D) only potential GDP fluctuates around its trend and real GDP remains equal to its trend.
E) potential GDP fluctuates around its trend.
Question 2
Refer to Figure 18.4. With free trade, how many gloves are produced domestically in Duckland?
A) 100 B) 80 C) 60 D) 0
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