FIGURE 21-3
-Refer to Figure 21-3. Assuming AE0 is the prevailing aggregate expenditure function, the distance 0A is a measure of
A) aggregate expenditure at equilibrium national income.
B) autonomous desired expenditures.
C) induced expenditures.
D) desired saving.
E) desired investment.

Question

FIGURE 21-3
-Refer to Figure 21-3. Assuming AE0 is the prevailing aggregate expenditure function, the distance 0A is a measure of
A) aggregate expenditure at equilibrium national income. 
B) autonomous desired expenditures. 
C) induced expenditures. 
D) desired saving. 
E) desired investment.

Quizplus · Accepted Answer

The distance 0A represents autonomous desired expenditures, which are the expenditures that occur regardless of the level of national income.

FIGURE 21-3 -Refer to Figure 21-3. Assuming AE0 Is the Prevailing Aggregate