2. If autonomous expenditure remains constant, and there is a decrease in the proportion of aggregate disposable income consumed in the economy, then.... A) equilibrium income will be reduced and the multiplier will be increased. B) equilibrium income will be increased. and the multiplier will be increased. C) equilibrium income will be reduced and the multiplier will be reduced. D) equilibrium income will be increased and the multiplier will be reduced. E) equilibrium income will be increased and the multiplier will remain unchanged.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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2. If autonomous expenditure remains constant, and there is a decrease in the
proportion of aggregate disposable income consumed in the
economy,
then....
A) equilibrium income will be reduced and the multiplier will be increased.
B) equilibrium income will be increased. and the multiplier will be increased.
C) equilibrium income will be reduced and the multiplier will be reduced.
D) equilibrium income will be increased and the multiplier will be reduced.
E) equilibrium income will be increased and the multiplier will remain unchanged.
Transcribed Image Text:2. If autonomous expenditure remains constant, and there is a decrease in the proportion of aggregate disposable income consumed in the economy, then.... A) equilibrium income will be reduced and the multiplier will be increased. B) equilibrium income will be increased. and the multiplier will be increased. C) equilibrium income will be reduced and the multiplier will be reduced. D) equilibrium income will be increased and the multiplier will be reduced. E) equilibrium income will be increased and the multiplier will remain unchanged.
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