In the following scenario, identify the correct sequence of events. If there is a $1 decrease in autonomous spending, the equilibrium output decreases by more than $1. This is because, a decrease in spending leads to

1. less output, change in planned investment and consumption

2. run down in inventories, decrease in production, less income, less spending

3. lower spending, lower consumption

4. lower income, lower planned investment

5. accumulation of inventories, decrease in production, less income, less spending

Answer rating: 100% (QA)

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