Consider the Following Information Describing a Closed Economy with No

question 59

Multiple Choice

Consider the following information describing a closed economy with no government and where aggregate output is demand determined.All dollar figures are in billions. TABLE 21-3 Refer to Table 21-3.Suppose this economy is in equilibrium.There is then a significant decline in house prices across the country.The likely effect is

• A)autonomous consumption will rise above $300 billion and equilibrium national income will therefore rise.
• B)autonomous saving will fall and equilibrium national income will therefore fall.
• C)autonomous saving will rise and equilibrium national income will therefore rise.
• D)autonomous investment will rise and equilibrium national income will therefore rise.
• E)autonomous consumption will fall below $300 billion and equilibrium national income will therefore fall.

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