What components of gdp tend to decline significantly
Problem
What components of GDP tend to decline significantly during recessions (particularly during the 2008 recession), and what GDP components rise during expansion? What aspects of GDP are mostly affected when the economy slows down, and why?
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The following table shows GDP data of a hypothetical economy that produces only two items. Calculate nominal GDP, real GDP, and GDP deflator for each row.
What components of GDP tend to decline significantly during recessions (particularly during the 2008 recession), and what GDP components rise during expansion?
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