Suppose the Level of Autonomous Spending Decreases at a Given

question 20

Multiple Choice

Suppose the level of autonomous spending decreases at a given price level.How does this relate to the aggregate expenditure line and the aggregate demand curve?  

• A) The aggregate expenditure line shifts upward, and the economy moves along the aggregate demand curve. 
• B) The aggregate expenditure line shifts downward, and the economy moves along the aggregate demand curve. 
• C) The aggregate expenditure line shifts upward, and the aggregate demand curve shifts to the right. 
• D) The aggregate expenditure line shifts downward, and the aggregate demand curve shifts to the left.

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Definitions:

Net Income

A measure of profitability that calculates the total revenue minus total expenses, taxes, and costs.

Book Value

The net value of a company's assets, excluding intangible assets, as recorded on the balance sheet, often compared to the company's market value.

Depreciating Equipment

The process of allocating the cost of tangible assets over their useful lives, reflecting the decrease in value of equipment.

Monthly Depreciation Expense

The portion of the total depreciation of an asset that is allocated for a particular month.