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Component of gdp in germany is consumption

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Reference no: EM131438181

Assess whether the following statements are true or false. Explain briefly.

a. The largest component of GDP in Germany is consumption.

c. The propensity to consume has to be positive, but otherwise it can take on any positive value.

d. Fiscal policy describes the choice of government spending and taxes and is treated as exogenous in our goods market model.

e. The equilibrium condition for the goods market states that consumption equals output.

f. An increase of one unit in government spending leads to an increase of one unit in equilibrium output.

g. An increase in the propensity to consume leads to a decrease in output.

Reference no: EM131438181

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