When the economy goes into a recession, typically, the component of spending that causes most of...
When the economy goes into a recession, typically, the component of spending that causes most of the decline in GDP growth is
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consumption |
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investment |
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government purchases |
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net exports |
he volatility of investment and consumption of durable goods, arises because these types of goods tend to be
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necessities |
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large items whose purchase is postponable |
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luxury goods |
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relatively inexpensive |
Homework Answers
Q1
Answer
Consumption
The consumption spending decrease in the recession as the income and cash flow in the market is slow so the spending decreases in the economy.
Q2
Answer
Option 2
large items whose purchase is postponable
Consumption of the goods is postponable so the change in price has more effect on the change in quantity for durable goods.
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