According to the Aggregate Expenditure Model, When Autonomous Expenditure Increases

Multiple Choice

According to the aggregate expenditure model, when autonomous expenditure increases, equilibrium expenditure

A) increases by a larger amount.
B) increases by an equal amount.
C) does not change because only induced expenditures increase equilibrium expenditure.
D) does not change because autonomous expenditures has no effect on equilibrium expenditure.
E) increases by a smaller amount.