2.2 Aggregate Demand

Question 1

Influences on Consumption 4

Answer 1

Disposable income
interest rates
consumer confidence
wealth effect

Question 2

Influences on Investment 5

Answer 2

Rate of economic growth- sends a signal that higher growth will generate higher profit

Interest rates-most investments are financed through loans
Demand for exports
Exchange rates
Confidence

Question 3

Influences on Govt Expenditure

Answer 3

Unemployment
Tax revenue

Question 4

Influences on net trade (x-m) 4

Answer 4

Household incomes
Exchange Rates
Abroad incomes
Protectionism