Analyzing Economic Shifts in a Simplified Economy
In the simplified economy of Econlandia, which has no government or international trade, economists have collected the following data for two consecutive years:
- Year 1: Household consumption was $700 billion, and planned business investment was $300 billion.
- Year 2: Household consumption rose to $750 billion, while planned business investment fell to $280 billion.
Based on this data, calculate the change in total planned spending between Year 1 and Year 2, and identify which component (consumption or investment) had a larger impact on this change.
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