A decade ago, Brazil had rapid growth but now its economy is experiencing a slowdown with investment
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A decade ago, Brazil had rapid growth but now its economy is experiencing a slowdown with investment falling and inventories increasing. Potential GDP growth rate has slowed. Business and consumer confidence has fallen.
a. Explain the effect of a decrease in investment on real GDP and potential GDP.
b. Explain how business and consumer confidence influences aggregate expenditure.
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Solution a Decrease in investment increase in inventories hopefully with zero change in t...View the full answer
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Related Book For 
Microeconomics Canada In The Global Environment
ISBN: 9780321931184
9th Edition
Authors: Robin Bade, Michael Parkin
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