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- What are the main components of measuring GDP with what is demanded?44. Which component of GDP will increase if disposable income increases? a. Government spending b. Investments c. Consumption d. Net exportsA reduction in personal income taxes increases Aggregate Demand through a. an increase in private savings. b. an increase in investment spending. c. an increase in personal consumption. d. an increase in national savings.
- During recessions which type of spending falls?a. consumption and investmentb. investment but not consumptionc. consumption but not investmentd. neither consumption nor investmentIn an economy, people like to eat and spend for restaurant foods. This change in behavior causes ______________________ in GDP. Select one: a. Increases b. Stable c. Unchanged d. DecreasesK The following equations describe consumption, investment, government spending, taxes, and net exports in the country of Economika. In Economika, equilibrium GDP is equal to $. (Round your asnwer the nearest dollar.) If real GDP in Economika is currently $4,850, which of the following is true? A. There will be an unplanned decrease in inventories, and real GDP will increase next period. OB. There will be an unplanned increase in inventories, and real GDP will increase next period. OC. There will be an unplanned decrease in inventories, and real GDP will decrease next period. O D. There will be an unplanned increase in inventories, and real GDP will decrease next period. OE. There will be no unplanned change in inventories, and real GDP will stay the same next period. C=200+0.80(Y-T) 1=400 G=350 T=350 X = 100
- Which of these is not true about aggregate demand? a. It includes consumption, investments, government spending, and imports b. It is the amount of total spending on domestic goods and services in an economy. c. It is what economists call total planned expenditure d. It is similar to gross domestic productWhat is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it?Respond the following statements by explaining whythey are true or false. For each statement, a complete and correct explanation 1. Business cycles are the periodic peaks and troughs of the financial industry and real estate (FIRE)sector of the economy. 2. Consumption of nondurables is more volatile than GDP, that is, it has a higher standard deviation, becausepeople like to take risks, so their consumption in nondurables varies more than their income month-tomonth. 3. Investment is countercyclical because, when GDP increases, consumption increases andinvestment falls. 4. Unemployment is countercyclical because the unemployment rate is negatively correlated withGDP.