Access over 20 million homework & study documents

search

Application Questions 1 Use the aggregate expenditure model develope

Content type
User Generated
Rating
Showing Page:
1/2
Application Questions 1. Use the aggregate expenditure
model developed in 3 this chapter to explain the following
statements: a. Coming amid continued turmoil in the finan-
cial and credit markets, the report sent stocks lower, with
the Dow Jones Industrial Average falling 146.70 points
Friday to close at 11,893.69 b. Administration officials said
they were confi- dent conditions would improve as tax
rebates that are part ofthe recent $152 billion economic-
stimulus package begin to reach consumers. c. The Fed is
expected to cut interest rates again to prop up the
economy.
Solution
Aggreagate Expenditure is the sum total of consumption,
investment, government purchases, and net exports.
a. When The Dow Jones Industrial Average will fall ,the
investments in the economy would increase. Thus,
increasing the overall aggregate expenditure in the
economy.This would further push the aggregate production
for the economy to be at equillibrium.
b.The tax rebates for the households will lead to an
increase in the overall Aggregate Expenditure as
Consumption would increase in the economy. Thus the
Aggregate Production will also increase which will no

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/2

Sign up to view the full document!

lock_open Sign Up
Unformatted Attachment Preview
Application Questions 1. Use the aggregate expenditure model developed in 3 this chapter to explain the following statements: a. Coming amid continued turmoil in the finan cial and credit markets, the report sent stocks lower, with the Dow Jones Industrial Average falling 146.70 points Friday to close at 11,893.69 b. Administration officials said they were confi- dent conditions would improve as tax rebates that are part ofthe recent $152 billion economic stimulus package begin to reach consumers. c. The Fed is expected to cut interest rates again to prop up the economy. Solution Aggreagate ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Great content here. Definitely a returning customer.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4