Question

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

Answer 1

Growth theory focuses on long run time horizons, whereas business cycles investigate short run time spans.

What is short run and long run in business cycle?

• Each nation’s economy varies between periods of extension and contraction.
• These changes are caused by levels of business, efficiency, and the whole request for and supply of the nation’s products and administrations.
• In the short-run, these changes lead to periods of development and retreat.
• But within the long-run, financial development can happen, permitting a country to extend its potential level of yield over time.
• Business cycles regularly care around short-term vacillations within the economy, that's five a long time or less.
• While growth hypothesis is more long-term arranged, they center on the long term enhancement of the economy.
• The time skyline for that's more than five a long time.

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