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Which component of total spending do you think are more volatile --- consumption or investment? Why?

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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Which component of total spending do you think are more volatile --- consumption or
investment? Why?
C is more volatile. This is because most investment decisions are taken with a longer horizon...

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