On a diagram of the planned expenditure function Ep and the 45-degree line,we find autonomous planned spending
A)where the 45-degree line hits the vertical axis.
B)at each level of output by the vertical distance between the Ep and 45-degree lines.
C)where Ep intersects the vertical axis.
D)at each level of income by the vertical distance from the horizontal axis up to Ep.

Question

Quizplus · Accepted Answer

Autonomous planned spending refers to the initial level of planned spending that is not related to the level of output or income. This is represented by the point where the expenditure function Ep intersects the vertical axis. At this point, the level of output is zero, but there is still some planned spending in the economy.

On a Diagram of the Planned Expenditure Function Ep and the 45-Degree