b) in the aggregate expenditure model, if aggregate expenditures (AE) are less than GDP the increases. “Do you agree with this statement? Discuss. (4 marks) 02 (sem 1, 15/16) 6.FISC Q1 is d) “Hurt by sliding consumer spending around the world, electronics giant Panasonic Corp. said it will slash spending on flat-panel television operations and pull out of unspecified money-losing businesses. President Fumio Ohtsubo said Friday the company will reduce planned investment in two Japanese factories making flat panels for TV sets by 23 percent or about $1.5 billion, in the fiscal year beginning April 1… Panasonic now will spend 445 billion yen (84.88 billion) on the plants through 2012, rather than the 580 billion yenc budgeted earlier.” Source: The Wall Street Journal, January 10, 2009. Based on the above statement, illustrate and explain the impact of Panasonie's changed investment plans on the investment demand curve diagram and the investment schedule. (10 marks) 5.AD-AS MODEL

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