During recessions, changes in investment spending are the biggest contributor to changes in
a) retail sales.
b) consumer spending.
c) real GDP.
d) personal income.
Ans: c) real GDP.
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What would cause a bank run?
A) Depositors feel that the bank does not have sufficient assets to cover their deposits. B) Bank managers choose to hold more excess reserves. C) Depositors feel that they are earning too low of a return on their deposits. D) Borrowers feel that they are being charged too high of an interest rate on their loans.
Which of the following events will cause the unemployment rate to increase?
A. an increase in population, with no change in the size of the labor force B. a proportionally equal increase in the labor force and the number of unemployed workers C. an increase in the labor force with no change in the number of employed workers D. an increase in the number of employed workers with no change in the number of unemployed workers