Investment expenditure is considered to be part of autonomous expenditure:
A) because it increases when savings increase.
B) decreases when real GDP decreases.
C) does not change when real GDP changes.
D) decreases when consumption decreases.

Question

Quizplus · Accepted Answer

Investment expenditure is considered autonomous because it is determined by factors other than the current level of real GDP, such as expectations about future profitability, interest rates, and technological innovations. It does not directly change with fluctuations in real GDP.

Investment Expenditure Is Considered to Be Part of Autonomous Expenditure