Autonomous expenditure is the portion of aggregate expenditure that:
A. equals planned spending.
B. is independent of income.
C. equals aggregate output.
D. equals induced expenditure.
Answer: B
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A ________ person is indifferent to a bet that has zero expected value
A) risk-neutral B) risk-loving C) risk-averse D) rent-seeking
If the consumer price index (CPI) in Year X was 300 and the CPI in Year Y was 325, the rate of inflation for Year Y was:
a. 325 percent. b. 25 percent. c. 5 percent. d. 8 percent.
Figure (a) represents the domestic demand and supply of televisions. Suppose free trade is allowed and the current world price of televisions is P1 as shown in Figure (b). Now suppose the domestic government imposes a tariff increasing the domestic price to P3 as shown in Figure (c). This tariff will cause
a. imports to rise.
b. exports to become Qe.
c. the domestic quantity demanded to be satisfied entirely by the domestically quantity supplied.
d. All of the above.
The persistent budget deficits of recent decades are
A) an expected result, because politicians have an incentive to levy taxes rather than spend on current programs. B) surprising, because politicians have a strong incentive to balance the government's budget. C) an expected result, because politicians have an incentive to spend on current programs financed by borrowing. D) surprising, because politicians have a strong incentive to run budget surpluses and thereby indicate that their actions have generated a profit.