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A Decline in Autonomous Consumer Expenditure Causes the Aggregate Demand

question 23

Multiple Choice

A decline in autonomous consumer expenditure causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________, everything else held constant.


Definitions:

Variable Costs

Costs that vary directly with the level of production, such as materials and labor.

AVC

Average Variable Cost, referring to the variable cost per unit of output.

MC

An abbreviation commonly used for marginal cost, which is the cost added by producing one additional unit of a product or service.

Average Variable Cost

The variable cost per unit of output; the total variable cost divided by the number of units produced.

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