Following graph shows business cycle fluctuation in a hypothetical economy. "Y" denotes year, and "Q" denotes quarter. What do points A, B, C, and D denote? Write at least a sentence each about what these points denote. Also, explain what represent the curve segments: A to B, B to C, and C to D. Lastly, because economic activity fluctuates, how is long-term growth possible? **Real GDP (billion $)**This graph displays the Real GDP measured in billions of dollars over a series of quarters. The x-axis represents different quarters, starting from Y1Q1 to Y3Q2. The y-axis measures the GDP in billions, ranging from 0 to 50.Key Data Points:- **Y1Q1:** The GDP starts at 20 billion dollars, labeled as point A.- **Y1Q2:** The GDP increases to approximately 27 billion dollars.- **Y1Q3:** The GDP rises further to around 32 billion dollars, labeled as point B.- **Y1Q4:** It slightly decreases to about 30 billion dollars.- **Y2Q1:** There is a drop to approximately 25 billion dollars, labeled as point C.- **Y2Q2:** The GDP increases again to around 28 billion dollars.- **Y2Q4:** The GDP rises to about 33 billion dollars.- **Y3Q1:** The GDP increases to approximately 37 billion dollars.- **Y3Q2:** The GDP significantly increases to 45 billion dollars, labeled as point D.Overall, the graph illustrates a general trend of increasing GDP with some fluctuations across the observed quarters.

The points A and C show the trough and the points B and D show peak. The trough is the lowest point…

Answered: Following graph shows business cycle…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Following graph shows business cycle fluctuation in a hypothetical economy. "Y" denotes year, and "Q" denotes quarter. What do points A, B, C, and D denote? Write at least a sentence each about what these points denote. Also, explain what represent the curve segments: A to B, B to C, and C to D. Lastly, because economic activity fluctuates, how is long-term growth possible?

**Real GDP (billion $)**

This graph displays the Real GDP measured in billions of dollars over a series of quarters. The x-axis represents different quarters, starting from Y1Q1 to Y3Q2. The y-axis measures the GDP in billions, ranging from 0 to 50.

Key Data Points:

- **Y1Q1:** The GDP starts at 20 billion dollars, labeled as point A.
- **Y1Q2:** The GDP increases to approximately 27 billion dollars.
- **Y1Q3:** The GDP rises further to around 32 billion dollars, labeled as point B.
- **Y1Q4:** It slightly decreases to about 30 billion dollars.
- **Y2Q1:** There is a drop to approximately 25 billion dollars, labeled as point C.
- **Y2Q2:** The GDP increases again to around 28 billion dollars.
- **Y2Q4:** The GDP rises to about 33 billion dollars.
- **Y3Q1:** The GDP increases to approximately 37 billion dollars.
- **Y3Q2:** The GDP significantly increases to 45 billion dollars, labeled as point D.

Overall, the graph illustrates a general trend of increasing GDP with some fluctuations across the observed quarters.

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