An increase in autonomous investment spending initially produces an equal
A) increase in household consumption.
B) decrease in household saving.
C) increase in income for workers and suppliers.
D) decrease in induced investment spending.
E) increase in depreciation.

Question

Quizplus · Accepted Answer

An increase in autonomous investment spending will cause an increase in income for workers and suppliers who are involved in the production of capital goods. This increase in income will likely lead to an increase in household consumption and savings as well, but the direct effect of an increase in autonomous investment spending is an increase in income for those involved in the production of capital goods.

An Increase in Autonomous Investment Spending Initially Produces an Equal