0
True or False. Investment spending is the most volatile component of aggregate expenditures?
Wiki User
∙ 13y ago
True
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
What is the smallest component of aggregate spending in US?
consumer spending
Ratio of change in GDP to an initial change in aggregate expenditures what?
Spending multiplier
What is the smallest component of aggregate spending?
Net exports.
Can anyone helps to explain the links between changes in the nations money supply the interest rate investment spending aggregate demand and real GDP and the price level?
An increase in the nation's money supply lowers interest rates, thus decreases the cost of doing business. With a higher return on investment, investment spending increases and so too does aggregate supply. As aggregate supply increases, aggregate demand increases and so prices go up. Thus real GDP and APL increase.
What are the factors that would affect the aggregate demand?
Consumption, investment, government spending, net exports, and aggregate expenditures.
What is the smallest component of aggregate spending in US?
consumer spending
Ratio of change in GDP to an initial change in aggregate expenditures what?
Spending multiplier
What is the smallest component of aggregate spending?
Net exports.
The component of the US GDP are?
I'll give you the expenditure approach Consumption- share of GDP from consumer spending Investment-share from firm investment Government Spending-share of government spending Net Exports (exports-Imports)
Can anyone helps to explain the links between changes in the nations money supply the interest rate investment spending aggregate demand and real GDP and the price level?
An increase in the nation's money supply lowers interest rates, thus decreases the cost of doing business. With a higher return on investment, investment spending increases and so too does aggregate supply. As aggregate supply increases, aggregate demand increases and so prices go up. Thus real GDP and APL increase.
Factors influencing economic growth?
That'll be any factors that influence the components of the Aggregate Demand (Consumption + Investment + Government spending + Net exports). Any factors that influence each and every component of AD will affect economic growth (through the multiplier process).
In an aggregate demand-aggregate supply diagram what will equal decreases in government spending and taxes do?
No effect. Spending will decrease Aggregate Demand, lower taxes will raise Aggregate Demand
Why is planned investment called an injection?
Planned investment is called an injection because it refers to new spending or investment that is added to the circular flow of income and expenditure in an economy. It injects additional income and spending into the economy, stimulating economic activity and potentially increasing aggregate demand. In contrast, unplanned changes in inventory levels are called leakages because they remove income and spending from the circular flow.
What has the author Morris Beck written?
Morris Beck has written: 'Government spending' -- subject(s): Appropriations and expenditures, Expenditures, Public, Public Expenditures
Is GDP connected to government spending?
Yes, government spending is included in the expenditures calculations of GDP.
Why would increasing the government budget deficit decrease investment spending?
Aggregate Demand = Consumption (C) + Investment (I) + Government Spending (G) + Exports (X) - Imports (M) Income = Consumption (C) + Savings (S) + Taxes (T) Aggregate Demand = GDP = Income C + S + T = C + I +G + (X - M) so I=S+(T-G)+(M-X) If T is less than G you will have a budget deficit. Which would make (T-G) negative and decrease investment.
