In a Certain Economy, the Components of Planned Spending Are

question 108

Multiple Choice

In a certain economy, the components of planned spending are given by: C = 500 + 0.8(Y - T) - 300r
Ip = 200 - 400r
G = 200
NX = 10
T = 150
Given the information about the economy above, what would be the impact on autonomous expenditures of a one-percentage-point increase in the real interest rate?

• A)Autonomous expenditures would increase by 35 units.
• B)Autonomous expenditures would decrease by 70 units.
• C)Autonomous expenditures would decrease by 35 units.
• D)Autonomous expenditures would decrease by 7 units.

---

Definitions:

Increased Use

A strategy aiming to encourage existing customers to use more of a product or service.

Technology

The application of scientific knowledge for practical purposes, especially in industry and everyday life.

Personal Interactions

Personal interactions refer to direct and reciprocal communication or engagement between two or more individuals.

Cell Phone

A portable telephone that uses wireless technology to send and receive calls and messages.