Which of the following does NOT occur as the economy moves from an expansion to a recession?
A) An initial decrease in autonomous spending is the trigger that creates the business cycle turning point.
B) The multiplier process reinforces any decrease in spending and pushes the economy into recession.
C) Incomes fall during recessions as firms cut production in response to unplanned increases in inventories.
D) The change in planned spending exceeds the change in real GDP.
Correct Answer:
Verified
Q133: Autonomous consumption is 50. With every increase
Q134: Q135: A fall in the price level Q136: Q137: The marginal propensity to consume is found Q138: An increase in the price level results Q139: An increase in expected future income _. Q140: The multiplier is the amount by which Q141: The expenditure multiplier equals Q142: At equilibrium expenditure, unplanned changes in inventory![]()
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