What describes the long-term growth path of GDP?

The long-term growth path of GDP is best described by the average growth rate around which the economy cycles. This concept acknowledges that while GDP tends to grow over the long term, there are fluctuations or cycles due to various economic factors such as changes in consumer confidence, monetary policy, fiscal policy, and external shocks.

During periods of expansion, the economy grows above this average trend, while during recessions, it may decline or grow below this average. This cyclical behavior highlights that although short-term fluctuations occur, the overall trajectory of GDP is upward, reflecting the economy's resilience and capacity for growth over time.

The other options do not accurately capture this relationship. Consistent annual rates of inflation would suggest a steady increase in prices rather than economic growth itself. A decreasing trend over time contradicts the general expectation of economic growth, while high volatility with frequent drops indicates instability rather than a long-term growth path.