Question
When autonomous investment increases, the level of consumption will _____________ as a result.
Step 1
This leads to an increase in income and employment in the economy. As a result, individuals and households have more income available to them. This increase in income can lead to an increase in consumption. When people have more money, they are likely to spend Show more…
Show all steps
Your feedback will help us improve your experience
Pragya Ahuja and 82 other educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
If an increase in autonomous consumer expenditure is matched by an equal increase in taxes, will aggregate output rise or fall?
The multiplier is the amount by which there is a change in autonomous investment when income or output increases by one unit.
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD