A decrease in autonomous consumption would have the same effect on the expenditures schedule as a(n)

Question

Quizplus · Accepted Answer

A decrease in autonomous consumption means that households are consuming less at all levels of disposable income. This will shift the expenditures schedule downward, as there will be less consumption at each level of income. Similarly, a decrease in investment would also shift the expenditures schedule downward, as there would be less spending overall in the economy. However, an increase in government purchases, increase in net exports, or decrease in taxes would all shift the expenditures schedule upward, as there would be more spending in the economy.

A Decrease in Autonomous Consumption Would Have the Same Effect