Saturday, November 01, 2008

Unit 2: Consumption, aggregate demand and economic growth

A gret little summary of the above links from tutor2u

This BBC video clip also illustrates why the US economy is shrinking

a) Using an AD/AS diagram, explain how a fall in consumption can lead to a fall in output in the economy
b) What other problems would arise in the economy if this was to occur?
c) What benefits might there be to the economy if this were to occur?
d) To what extent would such a series of events be beneficial to the UK economy in the long run?

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