Question

On the aggregate expenditure graph, if autonomous investment increases by $ 20 billion. the aggregate expenditure line shifts upward by $ 20 billion planned saving increases by $ 20

Answer 1

On the aggregate expenditure graph, an increase in autonomous investment of $20 billion shifts the aggregate expenditure line upward by $20 billion.

Step-by-step explanation:

On the aggregate expenditure graph, an increase in autonomous investment of $20 billion will shift the aggregate expenditure line upward by $20 billion. However, planned saving does not directly increase by $20 billion due to this change. Autonomous investment refers to spending that occurs regardless of the level of income, while planned saving represents the portion of income that households and businesses choose to save. These two concepts are related, but they do not have a one-to-one relationship.