Question: How does consumption spending affect aggregate expenditures and output over the business cycle? How does investment spending affect aggregate expenditures and output over the business

  1. How does consumption spending affect aggregate expenditures and output over the business cycle?
  2. How does investment spending affect aggregate expenditures and output over the business cycle?
  3. Which is more responsible for volatility - consumption or investment spending or both? Explain your choice.
  4. How do government actions affect consumption and investment?
  5. Given this knowledge, will YOUR consumption spending habits change? If so, how? If not, why not?

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