The Random Walk of GDP Model Assumes That

Multiple Choice

The random walk of GDP model assumes that

A) output follows a trend which can be explained by capital improvements
B) output generally follows a steady trend but there are always some transitory business fluctuations
C) there is no tendency for GDP to return to trend after a supply-side disturbance
D) permanent changes in output are infrequent, so changes in aggregate demand always dominate
E) all output fluctuations are transitory