Which component of total spending do you think are more volatile --- consumption or investment? Why?
Describe the effect of the following events would on the aggregate demand (AD) curve:
a/ A boost in research and development by computer companies produces more powerful and efficient computers and equipment.
b/ Income falls in several countries that trade heavily with the U.S.
c/ Prices fall across several industries.
d/ After a budget surplus, Congress moves to cut personal income taxes.
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