Author Question: Explain the determinants of aggregate private spending. What will be an ideal ... (Read 29 times)

skymedlock · **on:** Jun 30, 2018

Explain the determinants of aggregate private spending.

What will be an ideal response?

Question 2

Which of the following statements is false?

A) A bank's assets are its uses of funds.
B) A bank issues liabilities to acquire funds.
C) The bank's assets provide the bank with income.
D) Bank capital is recorded as an asset on the bank balance sheet.

durant1234 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Aggregate private spending, A, equals C plus I. So, A is a function of current income, future expected income, current taxes, future expected taxes, current interest rates, and future expected interest rates.

Answer to Question 2

D