A decrease in autonomous consumption will
A) shift the aggregate expenditure function downward.
B) decrease the marginal propensity to consume.
C) change the slope of the aggregate expenditure curve
D) decrease the marginal propensity to save.

Question

Quizplus · Accepted Answer

Autonomous consumption is a component of aggregate expenditure that is not influenced by income. If it decreases, then at any given level of income, total consumption will be lower. This means that the aggregate expenditure function will shift downward, as it reflects the relationship between total expenditure and income.

A Decrease in Autonomous Consumption Will