A Decrease in Autonomous Consumption Would Have the Same Effect

question 112

Multiple Choice

A decrease in autonomous consumption would have the same effect on the expenditures schedule as a(n)

• A)decrease in investment.
• B)increase in government purchases.
• C)increase in net exports.
• D)decrease in taxes.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of production.

Break-even Point

The point of business operation at which revenues equal expenses, resulting in no net loss or gain.

Variable Costs

Expenses that change in direct proportion to the amount of production or the volume of sales.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance expenses.