On the graph of GDP, government spending and net exports are:
A) horizontal lines because they are autonomous expenditures.
B) vertical lines because the level of spending is fixed.
C) upward sloping because they increase as GDP increases.
D) downward sloping because they decrease as GDP increases.

Question

Quizplus · Accepted Answer

Government spending and net exports are considered autonomous expenditures, meaning they do not directly depend on the level of GDP. They are typically represented as horizontal lines on a graph of GDP because their levels are determined independently of the current level of output or income.

On the Graph of GDP, Government Spending and Net Exports