In an article regarding Bangladesh's economy, the author suggests that the government ..."[g]ive double tax breaks on investment dollars. Give a tax break to R&D [research and development]. Give a tax break on donations to educational institutions." www.groundreport.com, March 24, 2008
The increase in investment is considered ________ and will generate a larger increase in ________.

Question

Quizplus · Accepted Answer

The increase in investment due to tax breaks is considered autonomous expenditure because it does not depend on the economy's current level of income or output. This initial increase in autonomous expenditure will generate a larger increase in induced expenditure, which is spending that depends on income or output levels, through the multiplier effect.

In an Article Regarding Bangladesh's Economy, the Author Suggests That