Question of the Week – Economics

This topic has 1 reply, 1 voice, and was last updated Apr-18 by AdaptPrep.

Author

Posts
- AdaptPrep
  Participant
  
  Sr Associate
  
  22 Apr 2018 at 7:38 am
  Up
  0
  Down
  
  If government spending increases, and total expenditures, investments, and the trade balance remains constant, consumption most likely will:
  - Decrease
  - Increase
  - Remain unchanged
- AdaptPrep
  Participant
  
  Sr Associate
  
  25 Apr 2018 at 8:24 am
  
  Up
  1
  Down
  
  This question is an application of the total expenditures
  formula:
  
  Total Expenditure = Consumption + Investments + Government
  Spending + Net Exports
  
  Solving for consumption, we get:
  
  Consumption = Total Expenditure – Investments – Government
  Spending – Net Exports
  
  If all the other items remain equal and government spending
  increases, consumption will decrease.
Author

Posts

Viewing 1 reply thread

You must be logged in to reply to this topic.