Investment spending is
A) less volatile than consumption spending.
B) much more volatile than consumption spending.
C) equally as volatile as government spending.
D) equally volatile as GDP.
E) a larger fraction of GDP than consumption is.

Question

Quizplus · Accepted Answer

Investment spending is generally considered to be much more volatile than consumption spending as it is dependent on factors such as interest rates, business confidence, and expected future profits. Consumption spending, on the other hand, is more stable as it is driven by factors such as household income and demographics.

Investment Spending Is