Autonomous consumption is defined as:
a. the level of consumption that depends only on the exchange rate.
b. the consumption expenditures incurred by the government.
c. the level of consumption that does not depend on income.
d. an equilibrium condition that needs to be met for the aggregate expenditure model to work.
e. the part of consumption that is related to investment.
c
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In the above figure, the total consumer surplus at the efficient level of output is ________
A) $4.5 million B) $9.0 million C) $2.5 million D) $8.5 million
For this question, assume that investment spending depends only on output and no longer depends on the interest rate. Given this information, an increase in the money supply
A) will cause investment to decrease. B) will cause investment to increase. C) will cause a reduction in the interest rate. D) will have no effect on output or the interest rate. E) will cause an increase in output and have no effect on the interest rate.