Question

Within the Keynesian aggregate expenditures model, which of the following autonomous changes would decrease the equilibrium output? a. An increase in government spending. b. A decrease in investment spending. c. An increase in consumption expenditures d. An increase in net exports.

Answer 1

Answer:

b. a decrease in investment spending

Explanation:

because if the government doesn't spend money in infrastructure, business training programs, TIC's, operational expansion of public entities, strengthening of technologies and programs that encourage the productivity the GDP will decrease, in consequence,  the equilibrium output will decrease too, also, the reduction of taxes and import tariff can incentive the production in a country and those are investments that the government must do to strengthen the economy.