An Increase in Autonomous Expenditure Shifts the AE Curve

question 24

Multiple Choice

An increase in autonomous expenditure shifts the AE curve

• A)upward but leaves its slope unchanged.
• B)upward and the curve becomes steeper.
• C)upward and the curve becomes less steep.
• D)downward and the curve becomes steeper.
• E)downward but leaves its slope unchanged.

---

Definitions:

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods once a year.

Retirement

The point in time when an individual chooses to leave the workforce permanently, often accompanied by receiving pension or retirement savings.

Annual Rate of Return

This is the percentage change in the value of an investment over a one-year period, taking into account both capital gains and income received.

Investment

The allocation of resources, usually financial, in expectation of a future return, which may include interest earnings, dividends, or appreciation in value.