Question

What are typical GDP patterns for a high-income

an economy like the United States in the long run and the short run?

Short answer

GDP is expected to grow over time in the long run. GDP, on the other hand, can move up and down in the near term.

Step-by-step solution

GDP definition

Gross domestic product or GDP can be defined as the value of all the final goods and services produced in an economy in a year.

Explanation

For a high-income economy like the United States, GDP is expected to grow over time in the long run. An upward movement can be seen in the GDP, in the long run. On the other hand, in the short run, it tends to fluctuate. This fluctuation can be caused by several factors such as inflation, business cycles, etc.