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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:

Exogenous Factors

External influences that can cause changes in an economic system, outside of the system’s control.

Price Shock Theory

A theory suggesting that sudden and unexpected changes in prices (typically upwards) can have significant adverse effects on an economy.

Business Cycle

The economic cycle of expansion and contraction that occurs within an economy.

Telecommunications Industry

A sector that facilitates communication over significant distances via telephone, internet, cable, and broadcasting.

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