Use the following Situation to answer the question : situation 20-1
Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 0.9.
-Keynes believed that changes in autonomous spending were dominated by changes in
A)consumer expenditure.
B)autonomous consumer expenditure.
C)investment spending.
D)taxes.
E)none of the above.

Question

Quizplus · Accepted Answer

Keynes believed that changes in autonomous spending were primarily driven by changes in investment spending, as it is more volatile and can lead to larger fluctuations in the economy.

Use the Following Situation to Answer the Question : Situation