Explore BrainMass
Share

Aggregate Demand Declines in 2001

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

THE RECESSION OF 2001â?"WHICH COMPONENT OF AD DECLINED THE MOST? Use the interactive feature of the Bureau of Economic Analysis Web site, www.bea.gov, to access the National Income and Product Account Tables. Select Interactive Data Tables, which is listed under Publications. On that page, select National Income and Product Accounts. Go to the List of All NIPA Tables and then find Table 1.1.6, which will give you access to real GDP figures for the U.S. economy. From Table 1.1.6 find the levels of real GDP, personal consumption expenditures (C), gross private investment (Ig), net exports (Xn), and government consumption expenditures and gross investment (G) in the first and third quarters of 2001. By what percentage did real GDP decline over this period? Which of the four broad components of aggregate demand decreased by the largest percentage amount?

© BrainMass Inc. brainmass.com October 17, 2018, 1:59 am ad1c9bdddf
https://brainmass.com/economics/macroeconomics/aggregate-demand-declines-gdp-361045

Solution Preview

This seems to be a trick question, because real GDP did not decline over this period. From Table 1.1.6 I found this data for 2001:

1 Gross domestic product
first quarter: 11,297.2
third quarter: 11,380.1
difference: + 82.9

2 Personal consumption expenditures
First quarter: 7,744.3
Third quarter: 7,807.7
difference: +63.4

7 Gross private ...

Solution Summary

Analysis of the decline in AD curing the recession of 2001.

$2.19
Similar Posting

Economy Export

Describe the various components of fluctuations in economy activity over time. Because economic activity fluctuates, how is long-term growth possible?

Why do economists pay more attention to national economies than to state or provincial economies?

How did the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon affected short- and/or long-term productivity in the United States?

How do the aggregate demand and aggregate supply curves differ from the market curves?

How is the U.S. budget deficit related to the foreign trade deficit?

Why would the following investment expenditures increase as the interest rate declines?
a. Purchases of a new plant and equipment
b. Construction of new housing
c. Increased inventories

Explain why intermediate goods and services usually are not included directly in GDP. Are there any circumstances under which they would be included directly?

View Full Posting Details