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Answer to Question #30261 in Macroeconomics for Mariana

Question #30261
What is the effect of decreasing these three components(following) on real GDP separately?

1)consumer sentiment - goes down...what happen to real GDP?
2)machinery orders - goes down...what happen to real GDP?
3)exports - expected to go down...what happen to real GDP?

WHY?!
Expert's answer
1)consumer sentiment - goes down, then real GDP decreases, as consumption fall, as it is one of the main components of GDP (cost method of calculation).

2)machinery orders - goes down, then real GDP goes down, as production fall and less goods are produced in the country.

3)exports - expected to go down, then real GDP goes down, as net imports decrease, as it is one of the main components of GDP (cost method of calculation).

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