Run economic fluctuations around long-run trends

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All societies experience short - run economic fluctuations around long - run trends. These fluctuations are irregular and largely unpredictable. When recessions do occur, real GDP and other measures of income, spending, and production fall, and unemployment rises. Any event or policy that raises consumption, investment, government expenditures, or net exports at a given price level increases aggregate demand, vice versa.

a) Which variable, investment or consumer spending has more affect on the business cycle? Why?

b) Name two macroeconomic variables that decline when the economy goes into recession. Name one macroeconomic variable that rises during a recession. Give reason to support your answer.

c) Is the Thai economy now in an expansion or a contraction? Explain

Reference no: EM132410766

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