Refer to the information provided in Figure 23.11 below to answer the question(s) that follow. Figure 23.11
-Refer to Figure 23.11. A $20 million decrease in autonomous consumption
A) changes equilibrium expenditure to $120 million.
B) changes equilibrium output to $180 million.
C) will change the MPC.
D) will change the MPS.

Question

Refer to the information provided in Figure 23.11 below to answer the question(s) that follow.  Figure 23.11
-Refer to Figure 23.11. A $20 million decrease in autonomous consumption
A) changes equilibrium expenditure to $120 million. 
B) changes equilibrium output to $180 million. 
C) will change the MPC. 
D) will change the MPS.

Quizplus · Accepted Answer

A $20 million decrease in autonomous consumption will shift the consumption function downward, causing equilibrium expenditure to decrease from $140 million to $120 million, with no change in equilibrium output. The MPC and MPS do not directly change in this scenario.

Refer to the Information Provided in Figure 23