A change in the value of any determinant of any component of autonomous spending will
A) change the slope of the planned expenditure line.
B) change the intercept of the planned expenditure line.
C) change the intercept and the slope of the planned expenditure line.
D) change the level of potential output.

Question

Quizplus · Accepted Answer

A change in the value of any determinant of autonomous spending affects the intercept of the planned expenditure line because it changes the initial level of spending independent of the level of income or output, but it does not affect the slope, which is determined by the marginal propensity to consume or invest.

A Change in the Value of Any Determinant of Any