If Autonomous Spending Decreases, Then

question 63

Multiple Choice

If autonomous spending decreases, then

• A) the expenditure multiplier means that equilibrium expenditure decreases by a larger amount.
• B) equilibrium expenditure does not change.
• C) equilibrium expenditure decreases by the same amount.
• D) the expenditure multiplier means that equilibrium expenditure increases by a larger amount.
• E) the expenditure multiplier means that equilibrium expenditure increases by a smaller amount.

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Definitions:

Paid-In Capital

The amount of capital provided by shareholders to a company in exchange for shares of stock, representing the funds contributed by investors during the issuance of shares.

Stockholders' Equity

Stockholders' Equity represents the owners' claim after all liabilities have been deducted from total assets. It's also known as shareholders' equity or equity.

Par Value

A nominal or face value assigned to a share of stock by the company's charter, unrelated to the market value.

Paid-In Capital

The amount of money that a company has received from shareholders in exchange for stock, exceeding the par value of the shares.