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Analyzing the impact of change in investment on GDP using AD/AS model.

Commentators on the US economy feel the US economy fell into a recession in 2001 and then proceeded into a slow =growth recovery due to a decline in investment.

A.describe how a change in investment can have a big impact on GDp causing a nationwide slump.Recall that investment is "small' relative to the whole economy.

B.Illustrate your reasoning using our AD/AS model.

C. describe how did low interest rates combined with increased government spending on defense and homeland security alter the US economic outlook?describe using our AD/AS model.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M916066

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