Multiple Choice
In 2007, investment in France increased by 7 billion euros, consumption increased by 4 billion euros and government spending increased by 1.5 billion euros. Assume the price level was constant and the economy was at full employment. As a result, suppose that equilibrium expenditure increased by 21 billion euros. In this example,__________ is the induced expenditure and__________ is autonomous expenditure.
A) investment; government spending
B) government spending; equilibrium expenditure
C) investment; consumption
D) consumption; government spending
Correct Answer:
Verified
Correct Answer:
Verified
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