As a household's disposable income increases, its autonomous expenditures _ and its induced expenditures .
A)do not change; increase by a smaller amount than the increase in income
B)increase; increase by a smaller amount than the increase in income
C)do not change; increase by an amount equal to the increase in income
D)increase; do not change
E)decrease; do not change

Question

Quizplus · Accepted Answer

Autonomous expenditures do not change with income as they are independent of it, while induced expenditures increase with income but by a smaller proportion.

As a Household's Disposable Income Increases, Its Autonomous Expenditures _