Economic recession-effect of invention

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1. Consumption accounts for about 60% of GDP, while investments accounts for about 20% for GDP. However many economists think that, to understand an economic recession, it is more important to look at investment than consumption. Why?

2. Suppose that a scientific breakthrough leads to the discovery of a new cheap source of energy. What would be the effect of this invention in the short-run and in the long-run?

Reference no: EM1311454

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