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What happens to aggregate output

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Reference no: EM13321325

1. If firms suddenly become more optimistic about the profitability of investment and planned investment  spending rises by $100 billion, while consumers  become more pessimistic and autonomous consumer spending falls by $100 billion, what happens to aggregate output?

2. A rise in planned investment spending by $100 billion at the same time that autonomous consumer expenditure falls by $50 billion has the same effect on aggregate output as a rise in autonomous consumer expenditure alone by $50 billion. Is this statement true, false, or uncertain? Explain your answer.

Reference no: EM13321325

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