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If Autonomous Expenditures Increased by $10 Billion, What Is the Change

question 51

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If autonomous expenditures increased by $10 billion, what is the change in aggregate demand at a given price level if the MPC to consume is 0.8?


Definitions:

Consume More

The action or tendency of increasing the use or consumption of goods and services.

Goods

Tangible products that satisfy human wants or needs.

Production Possibilities Frontier

A curve that represents the maximum productive capacity of an economy when all resources are fully utilized.

Consumption Possibilities

The range of goods and services that a consumer can afford to purchase at a given level of income and prices.

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