Autonomous expenditure refers to
A) aggregate expenditure solely prompted by policy.
B) changes in short-run aggregate supply.
C) aggregate expenditure that does not change when real GDP changes.
D) aggregate expenditure that varies because of changes in real GDP.

Question

Quizplus · Accepted Answer

Autonomous expenditure is the component of aggregate expenditure that is independent of the level of real GDP. This means it does not change when real GDP changes, reflecting spending that occurs even if income is zero, such as basic consumption or government spending.

Autonomous Expenditure Refers to