CH8 - Aggregate Expenditure
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt Play1/57
Earn XP
Description and Tags
term 3
Name | Mastery | Learn | Test | Matching | Spaced | Call with Kai | Chat |
|---|
No analytics yet
Send a link to your students to track their progress
58 Terms
Does higher disposable income increase or decrease consumption?
Increase.
Why does higher disposable income increase consumption?
Households have more money to spend.
Does lower disposable income increase or decrease consumption?
Decrease.
Why does lower disposable income decrease consumption?
Households have less money to spend.
Do lower interest rates increase or decrease consumption?
Increase.
Why do lower interest rates increase consumption?
Borrowing becomes cheaper and loan repayments fall.
Do higher interest rates increase or decrease consumption?
Decrease.
Why do higher interest rates decrease consumption?
Borrowing becomes more expensive and loan repayments rise.
Does higher household wealth increase or decrease consumption?
Increase.
Why does higher household wealth increase consumption?
People feel wealthier and spend more.
Does lower household wealth increase or decrease consumption?
Decrease.
Why does lower household wealth decrease consumption?
People feel poorer and spend less.
Does higher consumer confidence increase or decrease consumption?
Increase.
Why does higher consumer confidence increase consumption?
Consumers are optimistic about future income and employment.
Does lower consumer confidence increase or decrease consumption?
Decrease.
Why does lower consumer confidence decrease consumption?
Consumers become cautious and save more.
Does population growth increase or decrease consumption?
Increase.
Why does population growth increase consumption?
More consumers purchase goods and services.
Does high unemployment increase or decrease consumption?
Decrease.
Why does high unemployment decrease consumption?
Household incomes fall and uncertainty rises.
Do lower interest rates increase or decrease investment?
Increase.
Why do lower interest rates increase investment?
Borrowing becomes cheaper making investment projects more profitable.
Do higher interest rates increase or decrease investment?
Decrease.
Why do higher interest rates decrease investment?
Borrowing becomes more expensive making projects less profitable.
Does higher business confidence increase or decrease investment?
Increase.
Why does higher business confidence increase investment?
Firms expect higher future sales and profits.
Does lower business confidence increase or decrease investment?
Decrease.
Why does lower business confidence decrease investment?
Firms delay or cancel expansion plans.
Do higher expected profits increase or decrease investment?
Increase.
Why do higher expected profits increase investment?
Businesses expect greater returns from investing.
Do government investment incentives increase or decrease investment?
Increase.
Why do government investment incentives increase investment?
They reduce the cost of investing.
Does economic uncertainty increase or decrease investment?
Decrease.
Why does economic uncertainty decrease investment?
Businesses postpone spending because of increased risk.
Does expansionary fiscal policy increase or decrease government expenditure?
Increase.
Why does expansionary fiscal policy increase government expenditure?
The government spends more to stimulate the economy.
Does contractionary fiscal policy increase or decrease government expenditure?
Decrease.
Why does contractionary fiscal policy decrease government expenditure?
The government cuts spending to slow economic activity.
Do infrastructure projects increase or decrease government expenditure?
Increase.
Why do infrastructure projects increase government expenditure?
The government purchases more goods and services.
Are welfare payments included in government expenditure?
No.
Why aren't welfare payments included?
They are transfer payments and do not pay for current production.
Does a depreciating Australian dollar increase or decrease exports?
Increase.
Why does a depreciating Australian dollar increase exports?
Australian goods become cheaper for overseas buyers.
Does an appreciating Australian dollar increase or decrease exports?
Decrease.
Why does an appreciating Australian dollar decrease exports?
Australian goods become more expensive overseas.
Does overseas economic growth increase or decrease exports?
Increase.
Why does overseas economic growth increase exports?
Foreign demand for Australian goods rises.
Does an overseas recession increase or decrease exports?
Decrease.
Why does an overseas recession decrease exports?
Foreign demand for Australian goods falls.
Do higher Australian incomes increase or decrease imports?
Increase.
Why do higher Australian incomes increase imports?
Consumers can afford to buy more imported goods.
Do lower Australian incomes increase or decrease imports?
Decrease.
Why do lower Australian incomes decrease imports?
Consumers have less income to spend on imports.
Does an appreciating Australian dollar increase or decrease imports?
Increase.
Why does an appreciating Australian dollar increase imports?
Imported goods become cheaper.
Does a depreciating Australian dollar increase or decrease imports?
Decrease.
Why does a depreciating Australian dollar decrease imports?
Imported goods become more expensive.