Consider the Following Information Describing a Closed Economy with No

question 45

Multiple Choice

Consider the following information describing a closed economy with no government and where aggregate output is demand determined.All dollar figures are in billions. TABLE 21-3
-Refer to Table 21-3.Suppose this economy is in equilibrium.There is then a significant decline in house prices across the country.The likely effect is

• A)autonomous consumption will rise above $300 billion and equilibrium national income will therefore rise.
• B)autonomous saving will fall and equilibrium national income will therefore fall.
• C)autonomous saving will rise and equilibrium national income will therefore rise.
• D)autonomous investment will rise and equilibrium national income will therefore rise.
• E)autonomous consumption will fall below $300 billion and equilibrium national income will therefore fall.

---

Definitions:

Market Value Per Share

The current price at which a company's stock is trading on the open market.

Equipment

Tangible assets used in operations, such as machinery or tools, which play a crucial role in the production or service process.

Rights Offering

A corporate issuance of rights to current shareholders allowing them to purchase additional shares directly from the company at a discount to the current market price.

Subscription Price

The cost that must be paid by subscribers to purchase or subscribe to a service, investment, or product.