If Y = $100 billion, then C = $50 billion, and I = $60 billion. What will autonomous investment be when Y = $200 billion and C = $100 billion?
A) $50 billion
B) $60 billion
C) $100 billion
D) $120 billion

Question

Quizplus · Accepted Answer

Autonomous investment refers to investment that is not influenced by changes in national income. Therefore, it remains constant regardless of changes in Y or C. In this case, autonomous investment was given as $60 billion, which would not change with the increase in Y to $200 billion or C to $100 billion. Therefore, the answer is B, $60 billion.

If Y = $100 Billion, Then C = $50 Billion