Question 1

An economy's national accounts show the following changes over a financial year:

Consumer spending ( $C$ ) increases by $billion£15\text{ billion}$
Gross private investment ( $I$ ) falls by $billion£6\text{ billion}$
Government expenditure on goods and services ( $G$ ) increases by $billion£10\text{ billion}$
Government transfer payments (welfare and pensions) increase by $billion£5\text{ billion}$
Export revenues ( $X$ ) increase by $billion£8\text{ billion}$
Import expenditures ( $M$ ) increase by $billion£11\text{ billion}$

Calculate the net change in aggregate demand ( $A D$ ) resulting directly from these changes.

$billion+£21\text{ billion}$

$billion+£16\text{ billion}$

$billion+£22\text{ billion}$

$billion+£27\text{ billion}$

An economy's national accounts show the following changes over a financial year:

Consumer spending ( $C$ ) increases by $billion£15\text{ billion}$
Gross private investment ( $I$ ) falls by $billion£6\text{ billion}$
Government expenditure on goods and services ( $G$ ) increases by $billion£10\text{ billion}$
Government transfer payments (welfare and pensions) increase by $billion£5\text{ billion}$
Export revenues ( $X$ ) increase by $billion£8\text{ billion}$
Import expenditures ( $M$ ) increase by $billion£11\text{ billion}$

Calculate the net change in aggregate demand ( $A D$ ) resulting directly from these changes.

$billion+£21\text{ billion}$

$billion+£16\text{ billion}$

$billion+£22\text{ billion}$

$billion+£27\text{ billion}$

Aggregate demand