ECONOMICS
AGGREGATE DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Changes (improvements) in technology
|
|
|
Changes in consumer confidence
|
|
|
Changes in the level of household indebtedness
|
|
|
Changes in wealth
|
Detailed explanation-1: -The correct answer is C. the growth rate of GDP relative to growth rates in other countries. All the other options do play a role in consumption. However, the growth rate of GDP relative of growth rate in other countries does not play a role in the amount of consumption spending in a local economy.
Detailed explanation-2: -Technology is not a determinant of aggregate demand because aggregate demand includes consumption expenditure (C), investment expenditure(I), net exports (NX) and government expenditure (G). Hence, option (B) is co…
Detailed explanation-3: -Aggregate demand is the sum of four components: consumption, investment, government spending, and net exports.
Detailed explanation-4: -Some of the more important aggregate expenditures determinants are interest rates, expectations, fiscal policy, wealth, and exchange rates.