A change in consumption spending caused by income changes is ________ change in spending,and a change in government spending that occurs to improve roads and bridges is ________ change in spending.
A)an induced; an autonomous
B)an expansionary; a contractionary
C)an autonomous; an induced
D)a contractionary; an expansionary

Question

Quizplus · Accepted Answer

An induced change in spending is the change in consumption spending caused by income changes, meaning that it is influenced by changes in disposable income. On the other hand, an autonomous change in spending is a change in spending that is independent of changes in disposable income or other variables, such as government spending, investment, or exports. Therefore, a change in government spending to improve roads and bridges is an autonomous change in spending.

A Change in Consumption Spending Caused by Income Changes Is