An initial (autonomous)decrease in aggregate demand will likely be
A)Much smaller than the eventual decline in spending.
B)Much larger than the eventual decline in spending.
C)Equal to the eventual decline in spending.
D)Offset by an increase in planned investment.

Question

Quizplus · Accepted Answer

An initial decrease in aggregate demand can lead to a larger eventual decline in spending due to the multiplier effect, where the initial decrease causes further reductions in income and consumption, amplifying the overall impact on the economy.

An Initial (Autonomous)decrease in Aggregate Demand Will Likely Be