This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: The largest component of GDP in the US is typically: a. government purchases. b. social ... (Read 74 times)

pragya sharda

  • Hero Member
  • *****
  • Posts: 566
on: Jun 30, 2018
The largest component of GDP in the US is typically:
 
  a. government purchases.
  b. social securtity.
  c. consumption.
  d. investment.
  e. net exports.

Question 2

Briefly explain why changes in government spending or taxes do not have independent effects on aggregate demand. What does shift the aggregate demand curve in the classical model?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

debra928

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

Government spending and taxes do not have independent effects on aggregate demand because of the adjustment of the interest rate and resulting crowding-out effects on the components of private sector demand. The only things that shift aggregate demand are changes in the money supply or the velocity of money.


pragya sharda

  • Member
  • Posts: 566
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

frankwu0507

  • Member
  • Posts: 322
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

More than one-third of adult Americans are obese. Diseases that kill the largest number of people annually, such as heart disease, cancer, diabetes, stroke, and hypertension, can be attributed to diet.

Did you know?

Intradermal injections are somewhat difficult to correctly administer because the skin layers are so thin that it is easy to accidentally punch through to the deeper subcutaneous layer.

Did you know?

By definition, when a medication is administered intravenously, its bioavailability is 100%.

Did you know?

Always store hazardous household chemicals in their original containers out of reach of children. These include bleach, paint, strippers and products containing turpentine, garden chemicals, oven cleaners, fondue fuels, nail polish, and nail polish remover.

Goliath birdeater (Theraphosa blondi), the largest spider, next to a ruler. Goliath birdeater (Theraphosa blondi), the largest spider, next to a ruler.
The world has been horrified recently at a U.S. Congress so polarized and paralyzed that it cannot p The world has been horrified recently at a U.S. Congress so polarized and paralyzed that it cannot p
In 2013, Americans learned that the federal government massively surveys their phone calls and e-mai In 2013, Americans learned that the federal government massively surveys their phone calls and e-mai
Vienna: Social Structure and Social Interaction Vienna: Social Structure and Social Interaction
Social Jetlag Social Jetlag
Component of right internal ear Component of right internal ear
Video: Conduction of action potentials

For a complete list of videos, visit our video library