An increase in U.S. exports because of increasing foreign incomes is in the United States.
A) an increase in induced expenditure
B) a decrease in autonomous expenditure
C) a decrease in induced expenditure
D) an increase in autonomous expenditure

Question

Quizplus · Accepted Answer

An increase in U.S. exports due to increasing foreign incomes would lead to an increase in autonomous expenditure. This is because exports represent an injection of spending into the U.S. economy that is not directly influenced by domestic factors such as consumer or government spending (which would fall under induced expenditure). Therefore, an increase in exports due to external factors (i.e. increasing foreign incomes) would result in an increase in autonomous expenditure.

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