In constructing the planned autonomous demand schedule,which two components are assumed to depend on the interest rate?
A)government expenditures and net exports
B)government expenditures and net taxes
C)autonomous consumption and autonomous planned investment
D)autonomous consumption and net exports
E)government expenditure and autonomous planned investment

Question

Quizplus · Accepted Answer

Autonomous consumption and autonomous planned investment are the two components assumed to depend on the interest rate. Autonomous consumption is driven by factors such as consumer confidence and wealth, which are influenced by changes in interest rates. Autonomous planned investment refers to planned investment expenditure that does not depend on changes in national income, but it can be affected by interest rates as they impact the cost of borrowing. The other options listed are not directly influenced by changes in the interest rate.

In Constructing the Planned Autonomous Demand Schedule,which Two Components Are