A permanent increase in autonomous investment causes

Question

Quizplus · Accepted Answer

An increase in autonomous investment leads to a rise in aggregate demand, which in turn stimulates economic growth. This can lead to a more than proportional increase in real national income due to the multiplier effect. The multiplier refers to the process by which an initial increase in autonomous investment leads to further increases in national income as the increased spending stimulates further economic activity.

A Permanent Increase in Autonomous Investment Causes