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So, about #1: yes, Keynes argued that fluctuations in aggregate demand are usually driven by investment.
Since consumption remains stable, most fluctuations in aggregate demand stem from investment, which is driven by many factors including expectations, "animal spirits", and interest rates.
Similar(58)
The Moody's model works, broadly, by modeling short-term economic fluctuations as determined by changes in aggregate demand, and long-term fluctuations as determined by changes in aggregate supply.
"Further declines in aggregate demand, both corporate and consumer, are likely to overshadow such repair-related demand," he said.
The problem is that the pickup in productivity tends to create even greater increases in aggregate demand than in potential aggregate supply.
So somehow, even a great bubble wasn't enough to produce any excess in aggregate demand.
Nonetheless, temporary increases in government purchases caused temporary increases in aggregate demand.
AS THE Fed almost, nearly recognises, a shortfall in aggregate demand is constraining employment growth.
"The continued weakness in aggregate demand is likely the predominant factor," he said.
Her argument is that the reason unemployment remains high is the persistent shortfall in aggregate demand.
It may also delay some spending decisions and depress growth in aggregate demand in the near term.
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