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2 cards from this section. Quick, good the night before a test.
What does the 'I' in AD = C + I + G + (X-M) represent?
Think about business expenditures.
Name one factor that influences investment.
Think along the lines of how businesses make decisions.
What is investment a critical component of?
Look back at the formula.
Interest rates only affect consumer spending and not businesses.
Think about who borrows money.
Given a scenario where the government implements a tax cut for businesses, predict the expected outcomes on investment and employment.
Consider the effects of increased funds for investment.
Analyze a situation where consumer confidence drops significantly. How could this affect business investment and the broader economy?
Think about how expectations shape investment decisions.
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