A change in the values of variables in a macroeconomic model caused by a factor exogenous to the model is called:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Autonomous change
An autonomous change comes from a factor outside the model. For example, a rise in investment that does not come from a rise in income.
Option (1) Autonomous change — Correct. This is the Glossary meaning of autonomous change.
Option (2) Effective demand — Incorrect. The effective demand principle says that output is decided by aggregate demand alone when supply is fully elastic at a fixed price.
Option (3) Parametric shift — Incorrect. A parametric shift is the shift of a graph when a parameter, such as the slope c, changes.
Option (4) Multiplier effect — Incorrect. The multiplier effect is the larger rise in output that follows a rise in autonomous spending.
NCERT (2026-27), Introductory Macroeconomics, Glossary: “Autonomous change – A change in the values of variables in a macroeconomic model caused by a factor exogenous to the model.” Glossary: “Effective demand principle – If the supply of final goods is assumed to be infinitely elastic at constant price over a short period of time, aggregate output is determined solely by the value of aggregate demand. This is called effective demand principle.” Glossary: “Parametric shift – Shift of a graph due to a change in the value of a parameter.” |