Here is the synopsis of our sample research paper on The Aggregate Demand Equation. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
A 3 page paper discussing the equation C + I + G + (X - M). The aggregate demand equation demonstrates that changes in one area of the economy affect conditions in another. It also provides policy makers with specific areas from which to attempt to “fine tune” the economy so that if functions at optimal levels. Bibliography lists 3 sources.
Page Count:
3 pages (~225 words per page)
File: CC6_KSeconAggDemEqn.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
is the total of all types of demands within the national economy. Changes in one value may change others, but they certainly will affect the overall total. The
equation is given as: Aggregate Demand = C + I + G + (X - M), where C = Consumption I = Investment
demand G = Government demand X - M = Net Export demand Consumption C changes with any broad change in consumer activity.
Consumers are likely to spend more during prosperous times of nearly-full employment, interest rates are at a mid-level, inflation is stable and taxes are relative low. Any change in
any of these factors quickly is reflected in C. If interest rates increase, consumers purchases of small items such as groceries may not
change appreciably, but their purchases of houses and vehicles likely will decline significantly. Thus C decreases, and I likely will as well. Investment
The Investment portion of the equation is a function of the interest rate, but it also includes items such as taxes, business confidence and technology (McPhail, n.d.). "As
the interest rate rises, investment falls, because people borrow to invest" (McPhail, n.d.). Increasing taxes also cause I to decrease, because higher tax rates result in less capital being
available to invest. Business confidence is a significant factor as well. When would-be investors have less confidence that business will perform well,
they are less willing to risk their available capital in the stock market. Businesses dependent on the capital received through the sale of their stock may then seek additional
...