Composition of aggregate demand is a major determinant of the economy's long-run economic growth rate.

Question

Quizplus · Accepted Answer

The composition of aggregate demand, including the relative contributions of consumption, investment, government spending, and net exports, affects the long-term growth potential of an economy. For example, an economy with a higher share of investment in aggregate demand is likely to have higher productivity and long-term growth potential.

Composition of Aggregate Demand Is a Major Determinant of the Economy's