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Use the Aggregate supply and Aggregate Demand Model below to answer the questions that follow. Aggregate Supply and Aggregate Demand Model ASS Price CPI
Use the Aggregate supply and Aggregate Demand Model below to answer the questions that follow. Aggregate Supply and Aggregate Demand Model ASS Price CPI 210 E2 175 Es ADD2 E. ADD 150 ADD, | ADD, Full Employment 550 1100 1650 Real GDP Billion dollars per year (i) Examine the influence of government expenditure on investment in a nation. Use Jot Inc. Ltd a multinational construction company in which you are the Chief Exec of the firm that that is highly diversified and recieves funds to construct highways and other government funded projects. Also, explain the factors that cause the Aggregate Demand curve to be downward sloping left to right,
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Government expenditure G is a component of Aggregate Expenditure It represents Expenditures by government on goods and services and government local investments Therefore G directly impacts Investments The effect of G on investment is however dependent on the position of the economy on the ASS curve An increase in G leads to high government funding for local investments such as road construction bridges rails and more This means more funds are channelled to Jot inc Ltd to deliver government projects However a reduction in G would mean a fall in contracts given to Jot inc Ltd Since Investment ...
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Economics
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
18th edition
978-0077413798, 0-07-336880-6, 77413792, 978-0-07-33688, 978-0073375694
