In the Keynesian consumption function, autonomous consumption refers to consumption that occurs
Correct answer: B. Even when disposable income is zero
- A. Only when interest rates are falling
- B. Even when disposable income is zero
- C. Only when government transfers increase
- D. After planned investment becomes positive
Explanation
Autonomous consumption does not depend on current disposable income and may be financed through savings, borrowing, or existing assets. Consumption that changes with disposable income is induced consumption.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
When a central bank sells government securities in the open market, the immediate effect is generally to
A contractionary fiscal policy is intended primarily to
Which item is recorded primarily in the financial account of a country's balance of payments?
Which statement best describes a major source of long-run economic growth?
The World Bank classifies countries into four groups. This classification is based upon:
Automatic stabilizers are one of the __________ policy tools.