Question

4) The aggregate demand for home input can be written as a function of: I. Real...

4) The aggregate demand for home input can be written as a function of:
I. Real exchange rate.
II. Government spending.
III. Disposable income.
A) I only
B) III only
C) I and III
D) II and III
E) I, II, and III

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Answer #1

The Correct answer is I, II, and III

The aggregate demand for Home credit can be represented by the Real exchange rate, government spending and disposable income, These are the reasons that push and pull the demand of the home input. If the disposable income, Government spending is high and real exchange rate is favourable then the demand will be higher thus pushing demand for home credit and vice-versa. Thus, these can be written as the function of all of the above.

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