In the aggregate expenditures model, a change in autonomous spending has _____ impact on output and income in the economy.
A) no
B) an equal-sized and direct
C) a multiplied
D) an equal-sized and opposite

Question

Quizplus · Accepted Answer

A change in autonomous spending leads to a multiplied impact on output and income in the economy due to the multiplier effect. This means that the initial change in spending will result in a larger total change in the economy's output and income.

In the Aggregate Expenditures Model, a Change in Autonomous Spending