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Graphically Illustrate the Effects of an Increase in Autonomous Consumption

question 28

Essay

Graphically illustrate the effects of an increase in autonomous consumption on the demand line (ZZ)and Y.Clearly indicate in your graph the initial and final equilibrium levels of output.Briefly explain why this increase in output is greater than (in absolute terms)the initial change in autonomous consumption.


Definitions:

Beta

A measure of a stock's volatility in relation to the overall market.

Sharpe Measure

A formula used to calculate the adjusted return of an investment by considering its risk, allowing for comparison against risk-free assets.

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how much variation exists from the average.

Beta

A measurement of the volatility of a security or a portfolio in comparison to the market as a whole, used as a measure of systematic risk.

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