Any expenditure component that depends on the level of real GDP is called
A) induced expenditure.
B) spurious expenditure.
C) autonomous expenditure.
D) equilibrium expenditure.

Question

Quizplus · Accepted Answer

Induced expenditure is any expenditure that varies with the level of real GDP. It is induced because it is a result of changes in the level of economic activity. Autonomous expenditure, on the other hand, does not depend on the level of real GDP and is more independent in nature. Spurious and equilibrium expenditures are not commonly used terms in economics.

Any Expenditure Component That Depends on the Level of Real