Does an increase in autonomous consumption the a value in th

Does an increase in autonomous consumption (the \"a\" value in the consumption function) have the effect of increasing, decreasing, or not changing the size of autonomous spending multipliers (that is, the investment or government spending multiplier)?

increases the size of the multipliers
decreases the size of the multipliers
does not affect the size of the multipliers

Solution

The increase in autonomous consumption does not have any effect on the size of the multiplier. This is because the autonomous consumption is a constant. Hence a change in the autonomous consumption won\'t affect the size of the multiplier. Hence the correct answer is (C).