Holding All Else Constant, a Change in Autonomous Aggregate Expenditures

question 3

Multiple Choice

Holding all else constant, a change in autonomous aggregate expenditures will shift in aggregate demand by an amount equal to

• A) the change in autonomous aggregate expenditures.
• B) the multiplier times the change in autonomous aggregate expenditures.
• C) the change in real GDP divided by the change in autonomous aggregate expenditures.
• D) the multiplier.

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Definitions:

Dividend Growth Rate

The rate at which a company's dividend payments to shareholders increase over time.

Earnings

The amount of profit that a company produces during a specific period, which is often used to gauge the company's financial performance.

Growing Perpetuity

A type of investment that provides an infinite series of cash flows that grow at a consistent rate indefinitely.