A Criticism of the Monetarist Autonomous Spending Variable Is That

question 32

Multiple Choice

A criticism of the monetarist autonomous spending variable is that

• A)some types of autonomous spending do not affect aggregate demand.
• B)some types of autonomous spending affect aggregate demand before the spending occurs. Some types of autonomous spending affect aggregate demand when they occur.
• C)some types of autonomous spending affect aggregate demand only long after they occur.
• D)Keynesians do not think that autonomous spending affects aggregate demand.

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Definitions:

AVC

Stands for Average Variable Cost, which is the total variable cost per unit of output.

Short-Run Supply

The supply of goods that occurs when the sellers are only able to change some, but not all, conditions of production.

Diminishing Marginal Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Perfectly Competitive

A perfectly competitive market is one where many buyers and sellers trade identical products so that each has no influence on the market price.