Practicing Success
Identify which type of consumption will be there even at zero level of Income? |
Induced consumption Consumption National Consumption Autonomous Consumption |
Autonomous Consumption |
The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption.
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