Which of the Following Would Increase Autonomous Spending

question 35

Multiple Choice

Which of the following would increase autonomous spending?

• A) An increase in interest rates.
• B) An increase in house prices.
• C) A decrease in exports.
• D) An increase in business taxes.

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Definitions:

Hedge

An investment made to reduce the risk of adverse price movements in a security, often by taking an offsetting position in a related security.

Market Price

The current cost at which you can buy or sell an asset or service.

Bushels

A bushel is a unit of volume that is used in the United States for measuring quantities of agricultural produce, such as grains or fruits.

Perfect Hedge

A hedging strategy that completely eliminates the risk associated with a particular position or portfolio.