Induced expenditures are defined as that part of
A) autonomous expenditure that responds to changes in real GDP.
B) real GDP that does not respond to changes in aggregate expenditure.
C) aggregate expenditure that responds to changes in real GDP.
D) aggregate expenditure that does not respond to changes in real GDP.
E) autonomous expenditure that does not respond to changes in real GDP.
Question 2
In the above figure, if the interest rate is 2 percent per year, the ________ because ________.
A) demand for money curve will shift; the quantity of money demanded is less than the quantity of money supplied
B) demand for money curve will shift; the quantity of money demanded is greater than the quantity of money supplied
C) interest rate will change; the quantity of money demanded is less than the quantity of money supplied
D) interest rate will change; the quantity of money demanded is greater than the quantity of money supplied
E) supply of money curve will shift; the quantity of money demanded is greater than the quantity of money supplied
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