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U.S. import spending is not affected by U.S. real income but is influenced by the economic

U.S. import spending is not affected by U.S. real income but is influenced by the economic

U.S. import spending is not affected by U.S. real income but is influenced by the economic activity of its major trading partners and the exchange rate, hence import spending is taken as autonomous.

83) Higher marginal propensities to consume and invest will make the slope of the aggregate expenditure function steeper.

84) A larger marginal propensity to import will make the slope of the aggregate expenditure function flatter.

85) The equilibrium level of income and output is that level of income where the desired spending by all sectors of the economy equals the value of output produced and the income received from production.

86) Any supplement to consumer spending that increases domestic aggregate output and income is called a leakage.

87) Any uses of current income for purposes other than purchasing currently produced domestic goods and services are called an injection.

88) The multiple changes in income and output that results from a change in autonomous expenditure is called the multiplier.

 

Abhinav 07-Dec-2019

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