How will a decrease in autonomous investment affect the aggregate expenditure line?
A) It will shift the aggregate expenditure line upward.
B) It will shift the aggregate expenditure line downward.
C) It will result in an upward movement along the aggregate expenditure line.
D) It will result in a downward movement along the aggregate expenditure line.

Question

How will a decrease in autonomous investment affect the aggregate expenditure line?  
A) It will shift the aggregate expenditure line upward. 
B) It will shift the aggregate expenditure line downward. 
C) It will result in an upward movement along the aggregate expenditure line. 
D) It will result in a downward movement along the aggregate expenditure line.

Quizplus · Accepted Answer

A decrease in autonomous investment reduces overall spending in the economy, which shifts the aggregate expenditure line downward, indicating a lower level of total spending at each level of income. This is because the aggregate expenditure line represents the total spending in the economy at different levels of national income, and a decrease in investment spending reduces this total spending.

How Will a Decrease in Autonomous Investment Affect the Aggregate