Autonomous consumption is O consumption spending that depend on the level of income. O consumption spending that is earned rather than transferred from the government. O consumption spending when the marginal propensity to consume is 1. O the amount spent on consumption when disposable income equals zero.

Autonomous consumption is O consumption spending that depend on the level of income. O consumption spending that is earned rather than transferred from the government. O consumption spending when the marginal propensity to consume is 1. O the amount spent on consumption when disposable income equals zero.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

(a)‌Elaborate‌ ‌‌THREE‌ ‌(3)‌ ‌determinants‌ ‌in‌ ‌which‌ ‌consumption‌ ‌can‌ ‌be‌ ‌increased‌ ‌according‌ ‌to‌ ‌the‌ ‌consumption‌ ‌function.‌ ‌ ‌ (b)‌Assume‌ ‌that‌ ‌a‌ ‌three-sector‌ ‌economy‌ ‌in‌ ‌Country‌ ‌W.‌ ‌The‌ ‌amount‌ ‌of‌ ‌ autonomous‌ ‌consumption‌ ‌is‌ ‌RM300‌ ‌million‌ ‌with‌ ‌the‌ ‌proportion‌ ‌of‌ ‌an‌ ‌increase‌ ‌in‌ ‌income‌ ‌that‌ ‌is‌ ‌spent‌ ‌on‌ ‌consumption‌ ‌is‌ ‌0.5.‌ ‌An‌ ‌induced‌ ‌tax‌ ‌of‌ ‌20%‌ ‌is‌ ‌imposed‌ ‌by‌ ‌the‌ ‌country.‌ ‌The‌ ‌amount‌ ‌of‌ ‌investment‌ ‌is‌ ‌RM250‌ ‌million,‌ ‌and‌ ‌the‌ ‌amount‌ ‌of‌ ‌government‌ ‌spending‌ ‌is‌ ‌RM150‌ ‌million.‌ ‌ ‌ ‌ (i)‌Calculate‌ ‌the‌ ‌national‌ ‌income‌ ‌equilibrium.‌ ‌ ‌ ‌ (ii)‌Based‌ ‌on‌ ‌your‌ ‌answer‌ ‌in‌ ‌(i),‌ ‌show‌ ‌the‌ ‌aggregate‌ ‌expenditure‌ ‌graph.‌ ‌ ‌ ‌ (iii)‌Explain‌ ‌what‌ ‌would‌ ‌happen‌ ‌to‌ ‌the‌ ‌national‌ ‌income‌ ‌equilibrium‌ ‌if‌ ‌the‌ ‌ investment‌ ‌changes‌ ‌by‌ ‌RM100‌ ‌million.‌
13 In this consumption function C= C0 + C1*Yd equation; C1*Yd Known as Select one: a. Disposable income b. Autonomous consumption c. Marginal propensity to consume d. Induced consumption
Assume autonomous consumption is Gh¢ 400 million, autonomous investment is Gh¢ 300 million and marginal propensity to consume is 75%. Use income expenditure approach to calculate; I) the equilibrium national income Ii) the multiplier III) assume further that autonomous investment changes to Gh¢ 700, find the new equilibrium national income
Calculate autonomous consumption expenditure from the following date about an economy which is In equilibrium.National income = Rs. 1,100Marginal propensity to save = 0.20Investment expenditure = Rs. 80(Autonomous Consumption Expenditure = 120
Consumption function for a country; Let C = 100 + 0.75Y. Planned investments 1 = 200. In this case a) Find the equilibrium national income. b) Find the multiplier coefficient and interpret the meaning it expresses. c) Find the equilibrium consumption amount. d) Find the equilibrium saving amount. e) How much does the equilibrium national income change if i = 100? f) If C = 0.85, how would the equilibrium national income change? Explain. g) If C = 0.85, how would the equilibrium saving amount change? Explain
Explain Consumption Function along with schedule and Graph. Explain why Marginal Propensity to Consume (MPC) of poor is greater than Rich?
Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more than he's making in income b. 75 cents of every additional dollar of his income is saved. c. 75 cents of every additional dollar of his income is spent on consumption. d. 25 cents of every additional dollar of his income is spent on consumption.
Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million Exports = R150 millionAutonomous imports = R100 million Marginal propensity to consume =2/3 Tax rate = 1/10Marginal propensity to import = 1/10 Yf = R2 150 million Calculate the level of autonomous spending in this economy?
Q.1.14 In the Keynesian model, what is the most important determinant of ahousehold’s consumption?(a) Disposable income.(b) Total wealth.(c) The number of persons in the household.(d) Its’ net wealth. Q.1.15 Induced consumption is: (a) the part of consumption which is independent of the level of income.(b) the minimum level of consumption that is financed from sources otherthan income.(c) The maximum level of consumption that is financed from sources otherthan income.(d) shown by the slope of the consumption function.Q.1.16 In the Keynesian model, an introduction of a proportional tax will: (a) increase the slope of the consumption function.(b) reduce the multiplier.(c) increase the equilibrium level of income.(d) increase the multiplier.Q.1.17 A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the left.(c) shift the AS curve to the right.(d) leave both the AD curve and the AS curve unchanged.
Focus on the concept of marginal propensity to consume and reflect on which of the following would be implied by a highmarginal propensity to consume.O A small change in consumption when income changesO A high saving rateO A high marginal tax rateO An equilibrium level of income near full employmentO A low marginal propensity to save
Assume a closed economy in which, there is no government. If ouput (income) is 800,autonomous consumption is 100, and marginal propensity to consume is 0.70 in this economy.Then calculate the the amount of consumption spending?
Autonomous consumption spending 50 million Autonomous investment spending 10million Marginal propensity to consume ¼ Income under full employment (Yf) R950 million How to calculate the Autonomous spending The multiplier The equilibrium level of income The level of extra investment spending needed to get to Yf