In the Keynesian cross diagram,a decline in autonomous consumer expenditure causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________,everything else held constant.
A)up;rise
B)up;fall
C)down;rise
D)down;fall

Question

Quizplus · Accepted Answer

A decline in autonomous consumer expenditure means that there is less spending in the economy, leading to a decrease in aggregate demand. This causes the aggregate demand curve to shift downward. As a result, the intersection of the aggregate demand and aggregate supply curves occurs at a lower level of output, which means that the equilibrium level of aggregate output falls.

In the Keynesian Cross Diagram,a Decline in Autonomous Consumer Expenditure