The sum of the components of aggregate expenditure that are not influenced by real GDP is called
A) the MPC.
B) induced expenditures.
C) autonomous consumption.
D) autonomous expenditures.

Question

Quizplus · Accepted Answer

The sum of the components of aggregate expenditure that are not influenced by real GDP is called autonomous expenditures. Autonomous consumption refers specifically to consumption spending that is not influenced by changes in income, and induced expenditures refer to spending that is influenced by changes in real GDP. The MPC (marginal propensity to consume) is the fraction of additional income that is spent on consumption, and is not related to the question asked.

The Sum of the Components of Aggregate Expenditure That Are