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Graphically Illustrate the Effects of an Increase in Autonomous Consumption

Question 64

Essay

Graphically illustrate the effects of an increase in autonomous consumption on the demand line (ZZ)and Y.Clearly indicate in your graph the initial and final equilibrium levels of output.Briefly explain why this increase in output is greater than (in absolute terms)the initial change in autonomous consumption.

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ZZ line will shift upward and ...

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