If we consider the equation PAE = A + bY the part of the equation that relates to autonomous sources of spending is:
A) b
B) Y
C) A
D) PAE

Question

Quizplus · Accepted Answer

Autonomous sources of spending are the components of aggregate expenditure that do not depend on the level of income in the economy. In the given equation, A represents the autonomous component of aggregate expenditure as it does not depend on the level of income. The other components of the equation, bY depend on income level and are thus not autonomous.

If We Consider the Equation PAE = a + BY the Part