The baseline autonomous spending is that part of autonomous spending
A) that depends on the level of national income.
B) that depends on the level of the real interest rate.
C) that depends only on the level of foreign real GDP.
D) that is independent of the real interest rate.

Question

Quizplus · Accepted Answer

Autonomous spending refers to expenditures that occur regardless of the economy's current level of income or production, such as basic governmental spending or consumer spending that does not change with variations in income. Therefore, it is independent of the real interest rate, which affects investment and consumption decisions but is not a factor in determining baseline autonomous spending.

The Baseline Autonomous Spending Is That Part of Autonomous Spending