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AP® Macroeconomics

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New Economy and the Business Cycle

APMACR-XYULYJ

Consider the growth factors of the New Economy.

What effect would this new impact have on the business cycle?

A

No effect.

B

The trend lines of each cycle will become flatter/shallower.

C

The trend lines of each cycle will become steeper.

D

The business cycle will no longer mirror the shape of the production possibilities curve.

E

The business cycle will now appear more like a flat line with 0 slope.