1. Investment is a larger component of GDP than consumption, but it is much more volatile. _____...
Question:
1. Investment is a larger component of GDP than consumption, but it is much more volatile. _____ (True/False)
2. Investment spending is very_______, since it moves in conjunction with GDP.
3. The economist who developed the multiplier-accelerator model was _______.
4 Since investment spending rises and falls with GDP, it is_______
5. Animal Spirits. Use an aggregate demand and supply graph to show the effects on GDP of a burst or spurt of animal spirits that leads to higher investment in the economy
6. Index of Consumer Confidence and Investment in Durable Goods. Using the ideas of animal spirits, explain why changes in measures of consumer confidence would be correlated to consumer spending on durable goods.
7. Oil Price Floor and Investment Spending. Suppose the government said that it would not let the U.S. price for a barrel of oil fall below $50. It could do this by raising taxes on oil if the price fell below $50. What incentives do you think this would provide for investment in energy-saving technologies?
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1 False it is smaller than consumption although more volatile 2 Procyclical 3 Paul Samuelson 4 P...View the full answer
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