The Components of Aggregate Demand (HSC SSCE Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
Which component typically represents the largest share of aggregate demand?
Which component typically represents the largest share of aggregate demand?
Household consumption
What does Average Propensity to Consume (APC) measure?
What does Average Propensity to Consume (APC) measure?
Proportion of income spent on consumption
What happens to consumption when consumers expect their incomes to rise?
What happens to consumption when consumers expect their incomes to rise?
Increase spending, reduce saving
How do higher interest rates affect household consumption?
How do higher interest rates affect household consumption?
Discourage borrowing, encourage saving
Why does a more equitable income distribution lead to higher overall consumption?
Why does a more equitable income distribution lead to higher overall consumption?
Lower-income people spend higher % income
Which component of aggregate demand is historically the most volatile?
Which component of aggregate demand is historically the most volatile?
Business investment
During COVID-19, what investment incentive did the Australian Government provide?
During COVID-19, what investment incentive did the Australian Government provide?
Immediate full deduction of asset costs
How does inflation create uncertainty that affects business investment?
How does inflation create uncertainty that affects business investment?
Cannot predict future costs & prices
What defines an expansionary fiscal policy?
What defines an expansionary fiscal policy?
Higher spending or lower taxation
What effect does a weaker exchange rate have on Australia's net exports?
What effect does a weaker exchange rate have on Australia's net exports?
Increases net exports