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Question: Analyze how a non-income determinant of aggregate demand affects GDP. Choose and analyze one of the below GDP components and associated non-income determinants of aggregate demand:

• Consumption -- Net Wealth (Assets of Households minus Debts of Households), Price Level, Interest Rate, Consumer Expectations.

• Investment -- Interest Rate, Business Expectations.

• Government -- Change in Government Spending.

• Exports -- Foreign Income Levels, Exchange Rates.

• Imports -- Exchange Rates. Be sure to discuss if the chosen component and determinant analyzed had a change in GDP by an increase or decrease. Analyze and discuss if the determinant trend is expected to continue, and if so, for how long is it expected to continue. Explain why it is important for a business manager to understand aggregate demand.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93116320

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