Question

For an economy starting at full employment real GDP, an increase in autonomous expenditure results in a(n) g

Answer 1

When an economy has an increase in autonomous expenditure will results in a inflationary output gap.

What is Autonomous expenditure?

Autonomous expenditure refers to expenses that is incurred by a country.

It consist countries economy expenditure without the income.

Therefore, an economy starting at full employment real GDP, with an increase in autonomous expenditure results in decrease in autonomous expenditure results in a inflationary output gap.

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