As a household's disposable income increases, its autonomous expenditures ________ and its induced expenditures ________.
A) increase; do not change
B) decrease; do not change
C) do not change; increase by a smaller amount than the increase in income
D) do not change; increase by an amount equal to the increase in income
E) increase; increase by a smaller amount than the increase in income

Question

Quizplus · Accepted Answer

Autonomous expenditures are independent of income and do not change with changes in disposable income, while induced expenditures increase as disposable income increases, but typically by a smaller proportion.

As a Household's Disposable Income Increases, Its Autonomous Expenditures ________