An Increase in Autonomous Consumption Has the Same Equilibrium Effect

question 150

Multiple Choice

An increase in autonomous consumption has the same equilibrium effect as a(n)

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

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Definitions:

Income Bonds

These are a type of debt security where interest payments depend on the issuer's earnings, meaning if the issuer's earnings are insufficient, the bondholders may not receive interest payments.

Regular Bonds

Standard debt securities issued to investors that pay fixed or floating interest rates until maturity, where the principal amount is then repaid.

Bankrupt

A legal status of a person or entity that cannot repay debts to creditors and seeks the relief of such debts through court proceedings.

Interest Rates

The percentage charged or paid for the use of money, typically expressed as an annual rate provided by lenders to borrowers.