An Increase in Autonomous Consumer Expenditure Causes the Aggregate Demand

question 26

Multiple Choice

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

• A) rise; left
• B) rise; right
• C) fall; left
• D) fall; right

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Definitions:

Discounted Note

A promissory note or bond sold at a price lower than its face value, which will pay the face value at maturity.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the correct period.

Interest Income

Income earned from investments, savings, or credit extended, such as interest on bonds, savings accounts, or loans provided to others.

Interest Accrued

The amount of interest that has been earned or incurred but has not yet been paid or received.