[startupcfo]

This is question #67 in Category 2A of BEC QBANK

The question is what’s an induced investment.

I selected that it’s an investment based on the available income

However, there were options that talked about lending rates. Why wouldn’t that be a correct answer as well?

What exactly is autonomous vs induced?

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[monikernc]

from: https://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=induced+expenditures

Induced expenditures are expenditures by the four macroeconomic sectors (household, business, government, and foreign) that are related to and affected by the level of income or production. Induced expenditures are the essential component of Keynesian economics, reflecting the fundamental psychological law of consumer behavior and the notion of effective demand. This is one of two classifications of aggregate expenditures. The other is autonomous expenditures, aggregate expenditures that are unaffected by the level income or production.

In other words, aggregate expenditures can be divided into: (1) a minimum or baseline amount of expenditures which, in theory, would be undertaken even if the economy had no income and (2) additional expenditures that result from the income available to the economy

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
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[startupcfo]

So what would be examples of autonomous expenditures? What we spend on groceries?

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[Author]

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