Which of the following statement is correct with respect to economic fluctuationsSelect the two correct answersGroup of answer choicesHousehold’s consumption fluctuates relatively more than business investmentsIn most Wester modern economies, business investment make up the largest portion of the annual GDPIn general, investment spending is likely to be more volatile than consumption spendingHouseholds are more likely to smooth their spending over their lifetime than businesses

With reference to government spending (G), which of the following statements is correct.Select one correct answerGroup of answer choicesMuch government spending is very volatile but less so than investments, on average.Business investments are stable over a very long time horizon, while Government spending is much more affected by future demand.The government can spend what it likes.Government spending is likely to fluctuate with the business cycle (increasing in a downturn and vice versa) reducing economic instability

Investment demand (I)When one observes consumption and investment patterns over time, one finds that:QUESTION 8SELECT ONE:a.like consumption, investment is fairly stable over time.b.like consumption, investment is fairly erratic over time.c.unlike consumption, which is subject to erratic fluctuations, investment is fairly stable over time.d.investment is rarely affected by technological and economic factors.e.unlike consumption, which is fairly stable over time, investment is subject to erratic fluctuations.

Fluctuations in the business cycle is due to?  A. Changes in government policies and regulations.  B. Shifts in consumer preferences and tastes.  C. business investments  D. regular fluctuations in stock market prices.

We have discussed in class the concept of economic stability and economic fluctuations.The table below shows the changes in percentage points of the components of expenditure contributing to US GDP growth. The data is for the year 2009, during the height of the Great Recession caused by the global financial crisis. For instance, the second cell labelled "GDP" implies that GDP declined by 2.8 percentage points in 2009 relative to 2008:  YearGDPConsumptionInvestmentGovernment spendingNet exports2009−2.8−1.06−3.520.641.14 a) With reference to the role played by households, business and government in explaining the magnitude of economic fluctuations, can you try to highlight the main economic insights that can be learn from this table? [10 points]b) In any economy, a crucial factor for stability is the desire of households to maintain a steady level of consumption of goods and services over time, which is known as "consumption smoothing". But when faced with income shocks, this tendency can be hindered by various factors which we have extensively covered in class. Can you please elaborate on these factors and give examples of how they limit households' ability to smooth their consumption? [10 points]View keyboard shortcutsEditViewInsertFormatToolsTable12ptParagraph

All but one of the following are characteristics of short-term economic fluctuations. Which is the exception?Group of answer choicesNone of the aboveRecessions occur at regular and predictable intervalsExpansions and recessions are felt throughout the economyDurable-goods industries are more sensitive to short-term fluctuations than service and non-durable industriesUnemployment rises during recessions