A spending shock is any change in:
A)aggregate expenditure at a given interest rate and level of income.
B)borrowing conditions that changes the real interest rate at which people can borrow.
C)production costs that leads suppliers to change the prices they charge at any given level of output.
D)potential GDP in the economy.

Question

Quizplus · Accepted Answer

A spending shock refers to any unexpected change in aggregate expenditure, which is a function of consumption, investment, government spending, and net exports at a given interest rate and level of income. It could be caused by changes in consumer confidence, policy changes, or changes in global economic conditions, among other factors.

A Spending Shock Is Any Change In